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9/20/16 - What’s In Your Obligations Inventory?

Conway Dodge, Michael Sullivan, and Jacob Lesser from Promontory’s securities practice group published a column in Law360 on the Federal Reserve’s increasing emphasis on a compliance obligations inventory as part of a large bank’s risk management program.

“As financial regulators turn to enforcing compliance rather than writing rules, the Federal Reserve Board is increasingly asking financial institutions to produce and maintain a formal ‘obligations inventory.’ This is basically a comprehensive survey of the laws, regulations, and other legal and regulatory requirements and expectations applicable across a financial institution and all of its business lines.”

“The concept of a formal obligations inventory is likely new to many broker-dealers and investment advisers — entities that generally take their compliance cues from the U.S. Securities and Exchange Commission rather than the Federal Reserve.”