AIMPaaS™ for Risk and Compliance Officers
In light of more complex financial markets and more stringent rules and regulations, risk and compliance officers face a difficult task in identifying, monitoring, assessing and controlling the risks to their portfolios. The conventional risk measures which mainly rely on past information are insufficient to control and assess risks in a timely fashion. The key questions in your mind are:
- Are my portfolio managers doing some illegal or unethical trading activities and trying to cover them up?
- Are my portfolio managers changing their risk profiles due to job insecurity?
- Are my portfolio managers starting to deviate from their investment mandate?
- Are my portfolio managers hiding some important information from me?
- How can you detect those behaviors before it is too late?
- How can I keep track of the latest changes in financial rules and regulations and implement them in a timely fashion?
What do you need?
A comprehensive, state-of-the-art technology solution for investment and risk management process and subsequent oversight. It should feature:
- ability to monitor your portfolio managers' performance and risk profiles in real time
- ability to assess portfolio risks and behavioral risks proactively
- ability to compare the past VS. the present performances, trading styles, and risk profiles of the portfolio managers
- an alert for possible legal, regulatory and compliance violations in a timely manner
- an alert for trading violations or excessive risk taking by your portfolio managers
AIMPaaS™ has what you need and more
Our Risk and Compliance Module provide both conventional risk management technology along with our behavioral risk analytics that will help you be more proactive about controlling your risks.
Introducing Our Behavioral Variance Monitoring Technology
The goal of our "behavioral variance monitoring" feature of the AIMPaaS&trade& Risk and Compliance module is to provide early detection of changes in trading styles or risks, as well as potentially inappropriate, fraudulent, or illegal trading activities. Our system creates a behavioral profile for each trader/portfolio manager using approximately 20 key criteria, and notifies Management/Compliance when the trader/portfolio manager steps outside the profile in a statistically meaningful way, as determined by pre-set standard deviation levels.
Our pre-trade risk and compliance control system provides you with conventional risk management tools and our behavioral risk management tools.
- Monitor "manipulative and deceptive devices" on a real time basis. Those include marking at the close, "painting the tape", attempts to dominate and control pricing, insider trading etc.
- Provide system checks for regulatory compliance which may include short locate and restricted lists review.
- Restrict manual input errors and excessive or oversized trading activity that results from rogue or incorrectly functioning algorithms.
- Block trades that would result in violations of the Investment Management Agreement.
- Analyze unusual trading patterns.
- Send our customers a complete order trail.
- Alert our customers to potential violations and positions sizes that may require regulatory filings.
We pioneered a "behavioral variance monitoring" approach to help our clients proactively control their risks. The behavioral approach has the ability to uncover insider trading prior to the corporate announcement.
- Create a behavioral profile for each trader/portfolio manager using approximately 20 criteria such as average order size, average order value, percentage mix of market vs. limit orders, percent of assets under management, etc.
- Notify Management/Compliance when the trader/portfolio manager steps outside the profile in a statistically meaningful way, as determined by pre-set standard deviation levels.
Our post-trade risk control technology system provides you with real-time reports that highlight key risk factors:
- gross, net, beta and delta-adjusted exposures
- sector, regional and liquidity concentration
- exposures to key macroeconomic factors and other risk factors
- risk and drawdown analysis
- Value at Risk
It also alerts you to three key potential violations:
- legal, regulatory, and compliance violations
- Investment Management Agreement violations
- human trading errors