Source: Depository Trust & Clearing Corporation
The Depository Trust & Clearing Corporation today announced the appointment of Mihal Nahari, a highly regarded industry expert on legal, compliance and regulatory risk management, as chief compliance officer.
Nahari will have enterprise-wide responsibility for compliance activities at DTCC, principally focusing on such matters as anti-money laundering (AML), USA PATRIOT Act, Bank Secrecy Act (BSA) and record retention requirements. She will report to General Counsel Larry Thompson for administrative purposes, with dotted line responsibility to both Chairman and CEO Donald F. Donahue and to the chairman of the Board's Compliance and Operational Risk Committee on AML and compliance issues.
"Because of DTCC's vital role in providing safety and soundness to the financial services industry, DTCC and its subsidiaries have had strong compliance programs in place for a number of years," Donahue said. "However, Mihal brings added leadership, an extensive background and the knowledge necessary to meet the increasing complexity and pressing nature of compliance issues in the industry today."
In recent years, lawmakers and regulators have enacted a series of measures to increase oversight of the business sector, including financial services. The aim of DTCC's program is to promote transparency, ensure the soundness of capital markets, prevent fraud, protect investors, combat terrorist activity and enforce federal sanction on foreign entities hostile to U.S. interests.
"As vital players in the financial industry," Donahue said, "DTCC and our subsidiaries must be at the forefront in achieving the highest standards on regulatory and compliance issues. Mihal's appointment signals our commitment to expand and accelerate development and implementation of all aspects of DTCC's compliance programs."
Nahari has nearly 20 years' experience in the financial services industry on a wide range of domestic and international legal, compliance and regulatory risk management issues. Most recently, she was a partner with the New York law firm, Bressler, Amery & Ross, P.C. In this capacity, she served as an advisor to industry clients on regulatory and risk management subjects, including g compliance programs relating to anti-money laundering statutes and regulations and U.S. Treasury Office of Foreign Assets Control (OFAC) sanctions. In addition, she conducted internal investigations, and counseled and represented clients in regulatory enforcement actions and proceedings.
Prior to that, she was with Bank of America Corporation where she was senior vice president and AML executive with responsibility for overseeing and implementing AML compliance and risk mitigation strategies across the bank's global business. Nahari was also with Morgan Stanley for some eight years, where she established one of the first global AML and OFAC compliance programs at such a firm and later became the company's Global AML Officer. She later served as the firm's chief compliance officer for its retail and high net worth brokerage operations, managing all aspects of the compliance functions.
Nahari is a past co-chair of the AML committee of the Securities Industry and Financial Markets Association (SIFMA) and served as the industry's representative to the U.S. Treasury Department Bank Secrecy Act Advisory Group, where she played a significant role in the policy and regulatory development of the USA PATRIOT Act. In addition, Nahari is a frequent speaker on various securities industry panels, addressing a wide range of issues relating to AML compliance and terrorist financing.
She is a graduate of the Fordham University School of Law and a graduate of Rutgers University with a bachelor's degree in Economics and Spanish.
Separately, to support the U.K. Financial Services Authority's (FSA) enhanced requirements for agency lending disclosure with the implementation of Basel 2 in Europe, DTCC's SMART/Track for Agency Lending Disclosure service will soon be made available to members of the International Securities Lending Association (ISLA), beginning in mid-December.
European agent lenders will be able to use DTCC SMART/Track to create unique identifiers for non-U.S. principal lenders - one of the required data elements in the agency lending files - to disclose the identity of the principal lender to borrowers, so the borrower can complete a credit and capital analysis of the underlying, or principal, lender. The FSA requires agent lenders to disclose the identity of their principal lenders to borrowers and to provide details of exposures to underlying principals at least monthly from January 2008.
"Since 2006, ISLA has been planning a two-stage approach to introducing agent lender disclosure in Europe: an interim phase involving at least monthly disclosure followed by the introduction of daily disclosure in line with the U.S. market," said David Rule, ISLA Chief Executive. "Working with DTCC and using SMART/Track is a quick and easy solution to assigning unique identifiers that will ensure consistency with U.S. practices."
In addition to the Web screen feature in SMART/Track for Agency Lending Disclosure that creates these unique identifiers, the system can also act as a 'post office,' transmitting the agency lending data files between lenders and borrowers. SMART/Track provides acknowledgments and receipts for the file transmissions.
By January 2010, the FSA has stated it will require full, daily disclosure for all firms borrowing securities, at point of trade where possible and no later than a business day following settlement date. This initiative is similar to the one undertaken in the U.S. under the auspices of the U.S. Securities and Exchange Commission (SEC) and the Federal Reserve. Since October 2006, U.S. agent lenders have provided daily disclosure of underlying principals to U.S. borrowers using standardized file formats and DTCC as a data transmission hub.
"We are pleased that our SMART/Track service for Agency Lending can be leveraged to satisfy similar requirements in the E.U.," said Susan Cosgrove, Managing Director, DTCC Clearance and Settlement Group. "Extending use of the service beyond US domestic agent lenders and borrowers facilitates a standardized and cost effective global solution."
As a next step, ISLA is establishing a working group of borrowers and agent lenders, reporting to the ISLA Board, to oversee the planning and implementation of a model for daily disclosure in Europe.