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Navigating compliance challenges: How Hedge Funds are leveraging technology to stay ahead

Written by Douglas Moffat

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Navigating compliance challenges: How Hedge Funds are leveraging technology to stay ahead

In recent years, Hedge Funds have come under closer scrutiny from regulators as increasingly stringent regulatory requirements have been introduced. This means that demonstrating compliance can no longer be considered a ‘tick box exercise’, but a multifaceted challenge that requires vast amounts of data to be handled across departments.

To address this, Hedge Funds need to take a proactive approach to their regulatory reporting with many turning to technology to provide them with the tools needed to automate and streamline their compliance processes.

Tackling data complexity in regulatory reporting

One complexity that Hedge Funds face in their regulatory reporting is the sheer volume of data that must be tracked, verified and collated for submission. Due to the nature of a Hedge Fund’s internal set up, this data often exists in multiple silos across departments, making it more difficult to extract, unify and analyse efficiently.

eflow’s technology addresses this through a holistic, integrated approach. It delivers a comprehensive view of a Hedge Fund’s regulatory data, collating all of the relevant information in one place for quicker and more straightforward reporting.

How technology is helping Hedge Funds manage their regulatory compliance

Creating ‘one true view’ of the firm’s data

Consolidating data to achieve a single, accurate view is essential for effective compliance. It keeps key stakeholders, from compliance officers to executives, informed and aligned, reducing the risk of errors and miscommunication.

eflow’s highly detailed reporting functionality generates insights and management information that can be easily shared firm-wide, in an easy to understand format, providing one source of truth.

Access contextual insights through detailed reporting

By incorporating supplementary information, such as news and market events into their trade surveillance reports, Hedge Funds gain deeper insight into their compliance. Integrated communications surveillance goes one step further and provides a comprehensive overview of the communications taking place across the firm, monitoring them for suspicious activity. This helps them understand not only the “what” but also the “why” behind alerts generated by their system.

eflow’s TZTS trade surveillance and TZEC eComms surveillance solutions use supplementary information including news and market events, and communications surveillance to provide highly contextualised regulatory reporting from one system. This helps firms to transform their data into tangible insights that can strengthen their regulatory and operational performance.

Comprehensive monitoring of all types of market manipulation

Regulators are increasing their focus on proactive trade surveillance, meaning Hedge Funds need to keep a close eye on their trading activities to avoid potential instances of market abuse and manipulation.

eflow’s solutions monitor all trading activity for signs of manipulative behaviours, including front running, insider trading, personal account dealing and many more. By identifying and flagging suspicious activity in real time, Hedge Funds can take action promptly and protect their firm.

Break down silos and improve communication

Effective communication within Hedge Funds, particularly between compliance, risk and legal teams, is crucial. Having one system that facilitates the seamless sharing of information between departments not only facilitates the effective investigation of suspicious activity but does so in a quicker and more efficient way.

eflow’s integrated case management functionality helps firms to do just this, reducing the time that teams need to spend on investigations and allowing them to resolve issues transparently.

eflow’s purpose-built tools for Hedge Fund compliance

Streamlined trade surveillance with TZTS

eflow’s TZTS system enables Hedge Funds to manage their trade surveillance strategy through one centralised digital hub. With highly configurable monitoring parameters, consolidated data management and streamlined workflows, TZTS provides a holistic solution to mitigate the risk of market abuse. Hedge Funds can maintain oversight of their trading operations, ensuring they’re aligned internally and externally with regulatory expectations.

Comprehensive communications surveillance with TZEC

TZEC allows Hedge Funds to generate a comprehensive view of various communication channels, identify potentially suspicious behaviour, and make informed, data led decisions. By integrating it with TZTS, Hedge Funds can match communications with alerts of suspicious trade activity, providing a holistic overview for compliance teams.

Ensuring best execution with TZBE

TZBE is a best execution and transaction cost analysis (TCA) tool that offers a configurable digital solution to comply with regulations more efficiently and accurately. It gives a Hedge Fund the ability to demonstrate that it’s acting in the best interests of its clients and creates highly granular TCA reporting. Not only that, TZBE can also generate commercial insights by highlighting how your trading strategy can be executed more effectively.

Simplifying transaction reporting with TZTR

TZTR enables Hedge Funds to simplify and automate their transaction reporting processes. Reduce the administrative burden on your team, improve the quality of your data submission, and simplify exception handling through one holistic system.

Staying ahead of compliance challenges

As regulators continue to evolve, Hedge Funds need flexible, powerful tools to meet their requirements. eflow’s suite of solutions provides a tailored approach to compliance, empowering Hedge Funds to monitor their activity, streamline reporting and improve collaboration across departments. By leveraging these tools, Hedge Funds can stay ahead of regulatory scrutiny and ensure they not only meet compliance standards, but do so with greater efficiency and speed.

In an industry where maintaining trust and credibility is key, eflow’s solutions offer Hedge Funds a critical advantage. Find out how eflow’s solutions could help your firm by booking a no-obligation consultation with our team of experts. They can walk you through a personalised demo of our solution and offer advice on how best to overcome any trade surveillance challenges that your firm is facing.

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