Engagement Summary

Monticello Consulting Group (Monticello) partnered with a leading US bank to resolve a Matter Requiring Attention (MRA) issued by the Office of the Comptroller of the Currency related to incomplete trade reporting on US Government securities. The MRA was in relation of the SEC CFR § 12.3 – Recordkeeping requirements[1]. The goal of this engagement was to:

• Assess the trading activities in scope of this MRA
• Perform forensic data analysis for three-year trading activity
• Identify any trade recordkeeping shortcomings in the trade booking systems and related business operations
• Partner with bank’s risk, legal, and compliance team to provide remediation plan to OCC
• Oversee gap remediation and validate trade recordkeeping to achieve MRA compliance

Monticello was tasked to assist our client to demonstrate to regulators that all recordkeeping gaps were identified and remediated in a timely fashion. Monticello consultants leveraged their deep regulatory and change management expertise to lead the operations and technology enhancements required to comply with the regulatory requirements ahead of the compliance deadline.

The Monticello team designed a program governance structure that supported multiple workstreams comprised of legal and compliance leads, agile scrum delivery teams, developers, testing teams, and operational and business process owners. Additionally, Monticello supported senior leadership and program sponsors by providing continuous program status updates to the program’s Steering Committee and other critical stakeholders and decision makers.

Case Study Detail

PROJECT BACKGROUND

SEC CFR § 12.3 – Recordkeeping requires a government security dealer to maintain a chronological reporting of all cash and derivatives trading activity, including all economic trade details, over a three-year period. The dealer should also provide trade confirms, affirmation, customer accounts and all affiliate dealers as required in compliance with the rule. In this particular case, the large US bank had grown significantly through mergers and acquisitions over many years, and had multiple trade capture systems and operational processes that lacked the central controls to ensure record keeping and data quality standards expected by the regulatory agencies.

ENGAGEMENT OBJECTIVES

Data Forensics, Program Management & Governance

Built and managed OCC MRA program governance under Corporate Compliance and Fixed Income Trade Control group for the Global Banking Organization. Monticello contributed towards the design of the Program Management Office (PMO) to ensure all transformation and changes delivered as per the regulatory MRA mandates. The PMO structure included the following:

• Define program workstreams, reporting routines, and ongoing program governance based on regulatory requirements and alignment with business needs.
• Identify and manage program assumptions, key issues/risks and internal/external critical dependencies.
• Data forensic analysis to identify all gaps in existing processes/operations and systems, and build a strategy for gap remediation.
• Ensure adherence to overall enterprise change management standards.
• Ensure stakeholder engagement and buy-in

Management Communications & Reporting

Developed a strategic communications plan to provide critical updates to stakeholders in a timely fashion. The communication plan established audience, communication objective, and channel of delivery. Critical information was summarized in a dashboard that communicated regulatory updates, program status and key risks, issues and dependencies. In addition, the PMO defined key program metrics to facilitate the decision-making process of senior program executives.

BUSINESS VALUE

Monticello Consulting Group provides services across the financial services industry to ensure compliance and reduce regulatory risks. By working with clients to successfully translate complex regulatory requirements into effective business solutions, Monticello enables clients to implement the necessary risk and control framework to ensure industry challenges are turned into opportunities. Our team partners with cross-organizational client teams and oversees the end-to-end execution for MRA remediation. By leveraging our regulatory knowledge, change management expertise, and proven governance standards, Monticello successfully ensures global trading activity is not disrupted while undergoing a business-critical regulatory change.