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Securities and Derivatives

In an increasingly complex marketplace and changing regulatory environment, it is essential for financial institutions to develop sophisticated practices and policies that allow for profitability and compliance amidst shifting regulatory expectations.

Promontory’s professionals have decades of high-level regulatory experience, and offer exceptional perspective and concrete solutions on how to achieve compliance without sacrificing profitability. We are trusted advisers with a combination of regulatory and industry expertise that sets us apart from other firms. Our professionals have served as senior leaders in enforcement, examination, and policy at global securities and derivatives regulatory bodies; two former SEC chairs advise the firm.

Our past engagements include work for leading international financial institutions and regulators. We are regularly called upon to conduct reviews and assessments in matters demanding expert judgment; boards of directors, senior corporate executives, and staff at government agencies rely upon our authoritative reports.

Areas of Expertise:

Registration with the CFTC and SEC
Internal investigations
Regulatory relations
Defense support for SEC, FINRA, and other enforcement matters
Mock exams
Pre-exam preparation, exam assistance, and post-exam remediation
Reviews of sales practices and trading surveillance
Compliance and governance reviews
Internal-controls testing
Training
Policies and procedures review
Independent compliance consulting and monitoring
Whistleblower programs at public companies and regulated entities
Audit committees’ obligations and regulatory expectations
Public-company disclosure, including cybersecurity and sustainability considerations

Types of Clients Served

Promontory helps financial institutions and corporations resolve regulatory challenges with solutions that satisfy operational and strategic priorities. We are accustomed to collaborating with law firms, consultancies, and technology firms to achieve superior results for our clients. In the past, we have served:

Investment advisers and investment companies
Broker-dealers
Financial technology (fintech) companies
Asset-management businesses within integrated financial institutions
Public companies and their boards and committees
Insurance companies and other insurance providers
Hedge funds and private-equity firms
Pension funds and endowments
Service providers to the asset-management industry
Self-regulatory organizations
Futures commission merchants
Central clearinghouses
Credit-rating agencies
Exchanges
Swap dealers and major swap participants

Additional Resources and Publications

Improving Model Risk Management at Investment Advisers (PDF)

Representative Engagements

A major credit-rating agency has relied on Promontory’s expertise in preparing to meet the SEC’s new 2015 regulatory requirements for governance, conflicts of interest, and transparency. Promontory has guided it through developing a risk-governance framework, implementing a new policy on conflicts of interest, and validating its credit-rating models.
Promontory has aided the SEC in evaluating its financial data to better apply it for regulatory purposes, including examination, enforcement, policy-development, and rule-making activities.
A leading financial-technology company engaged Promontory to conduct a regulatory assessment of its business operations and advise its leadership on registration and other regulatory obligations.
Promontory was selected by two municipal securities firms to serve as their independent compliance consultant in connection with the SEC’s ongoing Municipalities Continuing Disclosure Cooperation Initiative.
In response to a rogue trading incident, Promontory was retained by the independent directors of a global financial institution to review, assess, and suggest improvements to the risk management program and controls infrastructure at its operating subsidiaries in the U.S., Canada, and U.K. Promontory made far-ranging recommendations related to enhancements around governance, risk, compliance, internal audit, and operating and other controls.
For a quantitative investment adviser, Promontory performed a comprehensive risk and compliance review. In particular, we focused on the firm’s model governance, disclosures about its quantitative investment approach, and approach to identifying, resolving, and documenting model errors.
For a registered investment adviser, Promontory acted as the independent compliance consultant pursuant to an SEC enforcement action. We conducted a comprehensive review of the adviser’s compliance program and supervisory and other policies and procedures for detecting and preventing breaches of its fiduciary duty and code of ethics, as well as violations of federal securities laws.
For a broker-dealer, Promontory conducted a review of its compliance and supervisory controls. Our review focused on governance, risk management, and compliance policies, procedures, and systems for trading, operations, and sales and marketing. Based on the review, we recommended enhancements to its controls.
For an investment adviser to three hedge funds, Promontory conducted a comprehensive review of the firm’s compliance controls. Throughout the review, we advised the client on its relations with SEC staff, including addressing actual and potential examination issues and enforcement actions.
For two major banking organizations, Promontory conducted a gap analysis comparing and mapping proposed and final rules issued by the CFTC, SEC and prudential regulators under Title VII of the Dodd-Frank Act against the firms’ existing policies and procedures, and controls for monitoring, testing, and training. As part of this process, we assessed the adequacy of each firm’s human and technological resources and their compliance with Title VII and identified deficiencies and required remediation. Promontory delivered a report outlining findings and recommendations on the organization, structure, staffing, and responsibilities of the firms’ compliance function and derivatives business model, and assisted the firms with implementation of these recommendations.
The CFTC engaged Promontory to review its market-surveillance program, including its systems and technological capabilities, processes for data storage and sharing, and practices for overseeing futures and related markets. We compared the CFTC’s surveillance practices to the practices of domestic and international regulators and exchanges, and provided a report with recommendations for enhancing the market-surveillance program, many of which have been or are in the process of being implemented.

Securities and Derivatives

Areas of Expertise:

Types of Clients Served

Additional Resources and Publications

Representative Engagements

Key Contacts

Experts

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