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Achieving Recording System Assurance with Automated Recording Checks
11 January 2018
Welcome - Today’s speakers
For more information on today’s topic please also visit: www.HolisticSurveillance.com
Tom McNeila
Product Marketing
NICE Financial Markets [email protected]
Steve Logan
Product Management Director
NICE Financial Markets [email protected]
NICE Financial Markets Compliance
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Our PortfolioENTERPRISE RISK CASE MANAGEMENT
Consolidates and correlates all data to provide a centralized, holistic view of risk, workflow management and investigation support.
Compliance Recording
Compliance Assurance
CommunicationSurveillance
MarketSurveillance
TradeReconstruction
Behavioral Analytics
Sales Practices & Suitability
COMMUNICATIONCOMPLIANCE
FINANCIAL MARKETS COMPLIANCE
AGGREGATE & ANALYZE
HOLISTIC SURVEILLANCE
Our Mission
To protect financial institutions by enabling regulatory trade
compliance through automation and intelligence.
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Changing Regulations
Top Global Regulations Impacting Communications
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Dodd-FrankUnited States Legislation
for Swaps
• Record Keeping
(Recording)
• Trade Reconstruction
MAREuropean Directive
• Detecting Market Abuse
• Detect and Prove Intent
Even if Unsuccessful
Code of ConductGlobal Guidance for FX
MiFID IIEuropean Directive
January 2018
Refers
to
• Surveillance in Place to Detect Market Abuse
• Record Keeping (Recording)
• Trade Reconstruction
2010 2016
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• In force since 3 January 2018
• Monitor all Voice Communications
• internal & external
• inbound & outbound
• pre- & post trade
• front- & back-office
• mobile phones
• Notification of recording: parties outside the firm must be notified all communication will be recorded
• All conversation must be retained for at least 5 years
• Monitor Market abuse:
MIFID II
firms must provide evidence theycapture and monitor all required communications
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• In force since July 2016
• Record all communications of ‘Direct Market Participants’ (Brokers and Dealers)
• Be able to identify intent
• Monitor Material Non-Public Information(MNPI)
• Identify of a responsible person for the dissemination of false or misleading information
MAR
- requires surveillance
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• Communications to be captured, tagged, retained, searchable
and available to the regulator within 72 hours from the request
• Firms require insight into their system to ensure they function
properly
• Transaction Reconstruction: Voice is a key component
• Prevent Fraudulent Practices: Now that firms captured voice,
email, IM and chat for their traders, they must have some form
of monitoring and surveillance in place
• Reports requested monthly, bi-monthly, quarterly, annually
Dodd-
Frank
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• Code of conduct was updated May 2016
• Measure and Monitor- firms are expected to promote and maintain a robust control and compliance environment to effectively identify, measure, monitor, manage, and report on the risks associated with their engagement in the FX Market.
• Compromising Confidential Information
• Complete and Accurate Data- This is fundamental to support effective surveillance.
• Each communication alert should be dispositioned to the extent that
it can be independently reviewed and audited
Code of
Conduct
Regulations Are Changing Recording Demands
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More Modalities More People
More ReportsMore Data More Conversations
More Proof
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Introducing
Did I capture everything I should have?
Do outside callers know they are being recorded?
Can I find the calls I am asked for quickly?
How do I know the system is working even though I don’t
have any alarms?
How do I prove the correct people are in the system and
successfully recording?
How do I export the calls you are asked for
quickly? Are all calls archived successfully with the correct
retention?
Are the correct people recorded?
• Multiple devices (turret, desk, mobile)
• Pre- and post trade conversations
• Back- and middle office
• On-site or remote working
• All required people and content is captured
• All regulated users are in the systems
• Reconcile regulated users are actually being captured
• Systems are fully operational
• Central retrieval from multiple locations
• Fast search for any type of communication
• Bulk download for conversations under investigation
• Monitor communications for market abuse
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More than Just Recording is Required
CaptureALL communications
ProveALL communications are
captured and stored
RetrieveALL communications quickly
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Recording Check
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Phone Tests to Prove Operation
• Test all the turrets and PBX phones on 34 recording systems.
• Different recording system locations
100% of all devices
255 days to complete
20 devices per day per site90 man days
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• Proactively detect any recording system
issues
• Test clients strategically placed in network
which can make test calls to each other
• Check successful recording and archiving
after test call is finished
• Trigger alarms in case of any Recording
Check failures
• Show the status of Recording Check test
NICE COMPASS
Automated Recording Checks
1. The Recording Check Server triggers execution of
the script(s) using the Task Scheduler.
2. RCS sends a command to the test client’s
Recording Check Agent App to create a call to
another test client.
3. Agent App sends audio, received by the Virtual
Audio Cable, serving as the audio device of the
VM. After that it sends a command to stop the call.
4. Test clients are targets in NICE Trading Recording,
recorded like any other call.
5. RCS checks if recordings with matching call data
are available in the NTR database and if the call
recordings were properly archived.
6. If there are any issues with recording or archiving,
the Recording Check Ntr Service raises alarms,
visible in the NTR WebGUI.
7. The Recording Check Server sends the test
results to the WebGUI of the NICE Compass
Portal.
COMPASS – Recorder Check Flow
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Thank you, please also join:
Webinar – 25 January 2018
Compliance Assurance Evidencing with Automated Reporting and Alerting
Regulations such as MiFID II with a global impact are also imposing new stricter reporting requirements on FSO’s which
now need to provide evidence to regulators that communications for all regulated users are being reliably recorded and
retained. Learn how NICE COMPASS’ automated compliance assurance reporting saves time, ensures compliance, and
reduces the risk of fines, by providing a thorough, end-to-end reconciliation of the entire recording process across all
regulated users.
www.HolisticSurveillance.com / webinars
For more information visit: www.HolisticSurveillance.com
