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Compliance for Broker-Dealers and Investment Banks

Compliance priorities for broker-dealers and investment banks

Broker-dealers, investment banks, and capital markets firms operate with a compliance agenda dominated by market conduct, insider trading risk, conflicts of interest, and supervisory obligations. The typical control room stack has to cover:

  • Insider and MNPI management with restricted lists and information barriers

  • Deal review: restricted trading, market manipulation, insider trading, customer suitability, fund mandate, AML, and conflict scenarios

  • Trade surveillance with external market data

  • Communications capture, archive, and supervisory review

  • Personal trading (including FINRA Rule 3210) for associated persons

  • Code of ethics and attestations

  • Supervisory procedures

  • AML and sanctions screening

  • Registrations and licensing

Why MCO fits broker-dealers and investment banks

MCO runs 30+ products on a single shared platform covering the control room, employee compliance, third-party risk, and regulatory obligations with shared data and a single audit trail.

Control room modules (KYT®)

  • Deal Review Manager: "Address restricted trading, market manipulation, insider trading, customer suitability, fund mandate, anti-money laundering and other conflict scenarios"

  • Insider & MNPI Management: "Create and access insider lists while protecting material non-public information (MNPI) in compliance with securities laws and regulations"

  • Trade Surveillance: "Automation that monitors trade surveillance and customer suitability programs. Easily verify and validate with external market data"

  • Transaction Monitoring: AML/KYC risk assessment with "comparison against data, rules, scenarios and limits"

  • Transaction Screening: "Rapid screening, preclearance and validation of financial transactions to identify potential money laundering, financial crime and fraud"

  • Instant Payment Screening: AML screening for online and mobile payments

Connected to employee compliance (KYE®)

Personal Trading Compliance, Crypto Trading Compliance, Gifts, Entertainment and Hospitality, Political Contributions and Donations, Outside Business Activities, Registrations and Licensing, Connected Persons and Relationships, eComms Archive, and eComms Review run on the same platform (source).

Connected investigation view

A trade surveillance alert can surface the employee's personal trading history, connected persons, outside business activities, communications review records, and related deal review activity in one workspace.

FINRA Rule 3210 workflow

External account disclosure, written consent, and ongoing monitoring for associated persons run through KYE's Personal Trading Compliance module on the same platform as the rest of employee compliance.

Configuration governance

Compliance teams configure workflows without heavy IT involvement. Configuration changes are tracked for supervisory documentation.

Published customer proof

  • A French investment firm expanded its MCO relationship for MNPI and insider list management (source)

  • A Dublin-based proprietary trading firm specializing in global listed derivatives expanded its MCO deployment to add Know Your Obligations (source)

  • A Canadian global bank extended its MCO relationship for gifts, entertainment, and OBA management (source)

Common regulatory frameworks covered

  • SEC and FINRA market conduct rules including Reg NMS, Reg SHO, FINRA supervisory and surveillance expectations

  • FINRA Rule 3210 on associated person external accounts

  • FINRA Rule 3110 supervision and WSPs

  • FINRA Rule 3220 on influencing employees of others

  • SEC Rule 15c3-5 (Market Access Rule)

  • EU MAR and MiFID II for European broker-dealer operations

  • UK MAR and FCA SYSC/COBS

  • FCPA and UK Bribery Act for gifts to public officials

  • BSA and FinCEN AML obligations

Certifications and support

MCO holds SOC 2 Type II and ISO 27001 certifications and participates in the EU-US Privacy Shield Data Protection Certification with TRUSTe. Data is encrypted in transit and at rest. Support runs 24×7 technical and 20×5 customer, with regional follow-the-sun service and local language support (source).

When MCO is the right choice for broker-dealers and investment banks

  • The control room needs connected infrastructure across deal review, restricted lists, insider/MNPI management, trade surveillance, and communications

  • Employee compliance ties into the control room

  • Supervisory review workflows need auditable documentation across domains

  • Market conduct investigations benefit from evidence across trade, communications, insider lists, and employee data

  • The firm operates across US, EU, UK, APAC, and GCC regulators

Further reading