Charles Schwab moves into compliance vendor space

Source: Charles Schwab

Charles Schwab has launched Compliance Solutions to help financial services firms and industry providers meet increasingly complex employee compliance and regulatory requirements.

Compliance Solutions represents the fulfillment of an initiative started in November 2011 when The Charles Schwab Corporation acquired Compliance11, Inc. and paired it with Schwab Designated Brokerage Services (DBS). Compliance11 provides regulatory compliance software and DBS provides trade monitoring services. Since the acquisition, the firm has focused on creating a unique suite of tools and resources for clients.

Compliance: An Opportunity and a Challenge

"Companies understand that they need to meet regulatory requirements, but at Schwab we believe compliance can and should mean more than a check-the-box approach," said Trish Cox, senior vice president for Corporate Brokerage Services at Schwab. "Consumers value open and transparent business practices, and positive perception in this area may benefit a company's bottom line. When managed effectively, a compliance program can be an opportunity to position a company favorably in the marketplace, build trust with clients, and enhance value and market share for a firm."

Schwab is seeing growing concern among its own client base of employers regarding compliance issues. "Our clients are coming to us for help as they face an increasingly complex regulatory environment that often outpaces their ability to manage compliance processes," said Scott Rister, vice president of Compliance Solutions at Schwab. "The business risk for our clients is real, and our solutions are designed to tackle it head on."

Proactive Trade Blocking: An Industry First

Among the chief concerns faced by regulated firms is improper securities trading. The number and types of firms that are required to monitor employee securities trading is growing rapidly. Employees may be prohibited from trading a specific security for a variety of reasons, such as the firm possessing material non-public information.

Schwab has introduced proactive trade blocking to address this challenge. Proactive trade blocking is unique in the industry and pr the industry and prevents employees from executing a prohibited trade in error, notifying them that the prohibited trade was blocked according to their company's rules. With other systems available today, even if a prohibited trade is detected, it is after the fact, which creates a poor experience for the employee and the employer alike, often requiring the trade to be canceled and unwound.

"Proactive trade blocking offers a much more streamlined approach and a much better experience, saving time and minimizing hassles. These trading errors are typically honest mistakes made by honest people. Now we offer a unique solution that helps them avoid these mistakes in the first place," said Rister.

Comprehensive Tool Set for Employers

Compliance Solutions offers additional tools and technology resources to help transform a company's overall compliance process from complex and time-consuming to simple and efficient. Comprehensive offerings include:

Proactive enforcement of company trading policies
Distribution and tracking of employee affirmations and disclosures
Logging and reporting of gifts and entertainment
A sophisticated, cloud-based software application
A scalable, flexible platform
Easier maintenance of compliance policies and procedures
Dedicated service and support teams
Bundled pricing for cost savings
Employee access to a full suite of brokerage products and services from Charles Schwab & Co., Inc.
Employee access to a range of banking products and services from Charles Schwab Bank

"Thinking bigger about compliance can benefit businesses beyond just fulfilling regulatory requirements," summarized Cox. "Building on a foundation that includes both advanced technology solutions and ethical best practices can help protect a firm's biggest assets: its people and its reputation."

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