Employees in the various industries, such as the investment banking industry, may become privy to non-public information during the ordinary course of business. Consequently, companies are concerned with the financial investments of their employees. Employees who trade on non-public information may violate insider-trading laws. Further, employees who have a personal financial stake in industries they deal with on behalf of the company may have a real or perceived conflict of interest.
Because companies wish to avoid even the appearance of impropriety, many regulate the investments made by their employees. Often, employees must assent to the policy of the company on securities ownership and other financial or fiduciary undertakings as a condition of employment. Employees also re-certify assent to and compliance with the policies on a periodic basis.
The policies to which employees must agree may include monitoring. For example, the employee or their affiliates (where the employee has a beneficial interest) may need to make investments in a brokerage account monitored by the employer. Investments in non-monitored accounts would need to be disclosed and possibly transferred to a monitored account.
In addition to monitoring past financial activity, companies may require their employees to seek clearance before purchasing or selling securities. For each employee, there may be a list of securities in which trading is never permitted. Investment in securities not on this list may still be ill advised and therefore require approval.
Assuring assent to the investment policy, disclosure of employees' investments, and pre-clearance for contemplated trades is a complicated and time-consuming process. When each of these functions is managed by a different person or division, employees may have to complete duplicative paperwork and the company may have to enter the same information into more than one database. Moreover, the volume of employees and trades to be monitored leads to a high probability of error. There is a need in the art to automate the investment monitoring and compliance tasks as well as to integrate them to avoid duplicative processing and data entry.
In light of the foregoing background, the following presents a simplified summary of the present disclosure in order to provide a basic understanding of some aspects of the invention. This summary is not an extensive overview of the invention. It is not intended to identify key or critical elements of the invention or to delineate the scope of the invention. The following summary merely presents some concepts of the invention in a simplified form as a prelude to the more detailed description provided below.
According to at least one aspect of the present invention, one or more computer readable media store computer executable instructions that, when executed, perform a method for ensuring compliance with an investment policy. Information about brokerage accounts and outside investments is collected from users. The brokerage accounts directly provide trade data. Requests for pre-clearance of a contemplated securities transaction are collected from users, and each request may be automatically approved, automatically denied, or held pending approval from another user. Reports of suspicious or otherwise note-worthy trades are generated.
This Summary introduces a selection of concepts in a simplified form. The concepts are further described below in the Detailed Description. The Summary is not intended to identify key features or essential features of the claimed subject matter, nor is it intended to limit the scope of the claimed subject matter.
A more complete understanding of aspects of the present invention and the advantages thereof may be acquired by referring to the following description in consideration of the accompanying drawings, in which like reference numbers indicate like features, and wherein:
Throughout this specification, “the system” refers to something containing or forming a part of an embodiment of the present invention. References to “the system” are not intended to be limitations; they do not imply that there is only one system, only one computer, etc. The words “the system” are used with reference to multiple aspects that are disclosed. However, not all aspects are necessary to the invention. Thus, “the system” discussed with reference to one aspect or embodiment of the invention is not necessarily the same system that is referenced when discussing another aspect or embodiment of the invention.
This specification makes extensive use of the words “employee,” “user,” and “supervisory user.” The term “employee” is meant to encompass anyone the operator of the system has an interest in monitoring with the system. It is not meant to embrace any formal or legalistic distinctions between the various types of people or entities that perform work for a company.
The term “user” is meant to encompass anyone who has an account on the system or about whom information is entered into the system. “Supervisory users” is a subset of users and includes those who have authority within the system to approve or deny requests or to otherwise view and/or modify information inputted by or about other users.
In the following description of the various embodiments, reference is made to the accompanying drawings. The drawings are a part of the description and illustrate various embodiments of the invention. It is to be understood that other embodiments may be utilized and structural and functional modifications may be made.
The invention is operational with numerous other general purpose or special purpose computing system environments or configurations. Examples of well known computing systems, environments, and/or configurations that may be suitable for use with the invention include, but are not limited to, personal computers, server computers, hand-held or laptop devices, multiprocessor systems, microprocessor-based systems, set top boxes, programmable consumer electronics, network PCs, minicomputers, mainframe computers, distributed computing environments that include any of the above systems or devices, and the like.
The invention may be described in the general context of computer-executable instructions, such as program modules, being executed by a computer. Generally, program modules include routines, programs, objects, components, data structures, etc. that perform particular tasks or implement particular abstract data types. The invention may also be practiced in distributed computing environments where tasks are performed by remote processing devices that are linked through a communications network. In a distributed computing environment, program modules may be located in both local and remote computer storage media including memory storage devices.
With reference to
Communication media typically embodies computer readable instructions, data structures, program modules or other data in a modulated data signal such as a carrier wave or other transport mechanism and includes any information delivery media. The term “modulated data signal” means a signal that has one or more of its characteristics set or changed in such a manner as to encode information in the signal. By way of example, and not limitation, communication media includes wired media such as a wired network or direct-wired connection and wireless media such as acoustic, RF, infrared, and other wireless media. Combinations of the any of the above should also be included within the scope of computer readable media. Although not shown, RAM 105 may include one or more are applications representing the application data stored in RAM memory 105 while the computer is on and corresponding software applications (e.g., software tasks), are running on the computer 101.
Input/output module 109 may include a microphone, keypad, touch screen, and/or stylus through which a user of computer 101 may provide input, and may also include one or more of a speaker for providing audio output and a video display device for providing textual, audiovisual and/or graphical output. Software may be stored within memory 115 to provide instructions to processor 103 for enabling computer 101 to perform various functions. For example, memory 115 may store software used by the computer 101, such as an operating system 117, application programs 119, and an associated database 121. Alternatively, some or all of computer 101's computer executable instructions may be embodied in hardware or firmware (not shown). As described in detail below, the database 121 may provide centralized storage of account information and account holder information for the entire business, allowing interoperability between different elements of the business residing at different physical locations.
Computer 101 may operate in a networked environment supporting connections to one or more remote computers, such as branch terminals 141 and 151. The branch computers 141 and 151 may be personal computers or servers that include many or all of the elements described above relative to the computer 101. The network connections depicted in
Additionally, an application program 119 used by the computer 101 according to an illustrative embodiment of the invention may include computer executable instructions for invoking user functionality related to communication, such as email, short message service (SMS), and voice input and speech recognition applications.
Terminals 141 or 151 may also be mobile terminals including various other components, such as a battery, speaker, and antennas (not shown). Input/output module 109 may include a user interface including such physical components as a voice interface, one or more arrow keys, joystick, data glove, mouse, roller ball, touch screen, or the like. As described herein, input/output module 109 may also include a reader/scanner to read/scan deposit items, including monetary items, to identify the type of monetary item it is. Such readers/scanner may read magnetic ink character recognition (MICR) data and/or other data from the monetary items for identification of the type of monetary item.
The users' information also may be sent to database 207, which stores the disclosures made by the employee as well as other information. Database 207 may also create an audit trail of information collected from or about each user, optionally including supervisory actions such as approvals of accounts or trades. Database 207 may or may not be synonymous with database 121. Database 207, like the rest of the system, may be distributed over one or more computers and/or storage devices.
An example of the other information stored in database 207 may be information 202 from designated broker dealers. Users who have accounts with designated broker dealers may have statements of their account, or other account information, transmitted automatically to the system and optionally recorded in database 207. This saves the user the hassle of entering trade data for these accounts, and it provides the system with a simplified and more reliable method of collecting information.
Users may also use web portal 201 to request pre-clearance for a trade 204. Supervisory users may approve or deny these requests through web portal 201. The request, as well as the approval or denial, may be logged in database 207. Pre-clearance requests may be denied or approved automatically in some cases. In other cases, the requests may be held pending review by a supervisory user. An employee demographic data component 209 may include data from another system or may maintain the data. Employee demographic data may be used by one or more other components, such as the pre-clearance trade component 204, to obtain employee data as needed. Such data may include a name of the employee, a location of the employee, such as by city or state, a building that the employee works out of, a title of the employee, a unique code associated with the employee, a line of business or division, or some other identification data.
By using information from the designated broker dealers 202, database 207 may be used to compare the trades for which pre-clearance was requested 204 with the trades that actually occurred. In addition, large accumulations in one company, short-term trading, or other activity of interest to supervisory users may be detected by generating reports 205 from the information in database 207. These reports may be displayed via web portal 201. A historical account data component 208 may be included between the web portal 201 and database. The historical account data component 208 may include historical employee account data in addition to historical employee affiliate account data. Previously entered or converted data for employee or employee affiliate accounts that were previously disclosed to the system may be maintained here. When generating various reports and/or alerts, such data may be utilized. In addition, such data may be utilized by other components of the system as needed.
In addition to generating reports upon request, database 207 may be used automatically to generate warnings regarding certain activity. For instance, a surveillance model 206 may detect short-term trading in investment products generally considered to be long-term instruments. If such activity occurs, the surveillance model 206 may alert the appropriate users via web portal 201 or via other means, such as email.
While
Components 203, 204, 205, 206, 207, 208, and 209 are illustrative, and need not all be present. In some embodiments, one or more of the components 203-209 may be maintained within the same database. Each component, as well as the combination of all components, may be comprised of instructions running on more than one computer. Finally, the flow of information in
Action Items list 302 includes links to forms the user may be requested to complete, but does not necessarily have to complete. For example, users may be required to pre-clear any securities transactions, but they do not need to trade securities. Hence, the Action Items list 302 includes a link to submit information about a contemplated trade for approval. If a user has already disclosed information, she may update that disclosure by clicking a link that would appear in Action Items list 302. If an update or recertification is mandatory because a pre-defined period of time has passed, then the corresponding link may appear in list 301. In certain embodiments, certain users may have rules based on their demographic data, for example, Bands 0-1, executive level employees, may see a different pre-clearance screen and rules based on their status. This flexibility in defining rules and screen views may be built into the system.
In accordance with at least one aspect of the present invention, the due dates for periodic disclosures or certifications by each employee may be staggered. This would allow those who review the disclosures to receive a steady stream of responses rather than multiple responses on the same due date.
Other areas of the web portal, such as links section 303, may include news, updates as to the status of a user's pending requests, or other information. For example, in
If any of the financial positions or trades made by an employee is contrary to a company policy, they may be denied by a supervisory user. In this context, examples of a supervisory user may include the employee's actual supervisor or a user who works in the company's compliance department.
Searching and sorting capabilities are also useful for supervisors seeking to monitor the financial positions or progress of their supervisees. For instance, if a supervisor seeks to ensure that all of her supervisees assented to a confidentiality agreement (or other agreement) before beginning a project, the supervisor may view each employee's status using the screen disclosed in
In addition to the time savings for the supervisory user, immediate feedback is also advantageous to the requesting user. Whether approved or denied, users also may learn the reason for the decision made through the online system quickly. If the system acted on the request automatically, then it could also indicate the reason for the decision. If a supervisory user approved or denied the request, that user could leave a comment along with the decision.
This ability for rapid feedback provides users the chance to modify requests in order to increase the likelihood of approval. For instance, company policy may prohibit holding more than 5% of any one company. If a user sought to purchase shares that would result in total holdings of more than 5%, receiving an explanation for the denial would allow the user to modify the request and instead purchase 4.9%.
The automatic system of managing pre-clearance requests has the additional advantage of automatically expiring requests submitted too far in the past. This provides the advantage of keeping requests that were not acted upon from continuing to clog the queue.
As discussed above with reference to
Some behaviors by employees may be prohibited by company policy or governmental regulations. Instead of running queries manually, the system may check for suspicious or prohibited behavior automatically and alert one or more users when such behavior is encountered. Alerts may use the web portal, email, or other means of notification. Optionally, the system also may notify the employee whose activities triggered the alert. As mentioned with respect to
Finally,
The automated system's ability to classify users into groups allows for efficient enforcement of company policy. For example, employees at level A may be subject to different rules than employees at level B. In addition, each business unit may have unique rules. The groups to which each user belongs may determine which rules and policies the system will enforce with respect to that user. A trade that may be acceptable for one user may be denied automatically for another. The potential to handle policies easily that do not apply with uniformity is an advantage in accordance with some aspects of the present invention.
While illustrative embodiments of various aspects of the present invention are shown, those skilled in the art will understand that the invention is not limited to these embodiments. Modifications may be made by those skilled in the art, particularly in light of the foregoing teachings. For example, each of the elements of the aforementioned embodiments may be utilized alone or in combination or subcombination with elements of the other embodiments. It will also be appreciated and understood that modifications may be made without departing from the true spirit and scope of the present invention. The description is thus to be regarded as illustrative of the present invention, not restrictive thereof.