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Are You Really Sure You're Dodd-Frank Compliant?

By  Erik Raper Erik Raper  on 2015-01-06 10:00:00  |  Featured in  Financial Services
Erik Raper
Posted By Erik Raper
in Financial Services
on 2015-01-06 10:00:00


In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. This new legislation immediately created new challenges for financial institutions and established greater government oversight and controls for companies in the banking industry. The key provisions of the Dodd-Frank Act include the following:

  • The Dodd-Frank Act creates a Financial Stability Oversight Council composed of various federal officials in the financial field and designed to spot emerging risks to U.S. economic stability before they become major meltdowns.
  • Dodd-Frank requires banks to create an exit strategy that protects consumer interests in the event of a major failure.
  • The Act provides for increased regulatory control over swaps, derivatives, hedge funds, proprietary trading and equity funds. The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) will be empowered to make rules governing these elements of financial trade.
  • Under Title VII of Dodd-Frank, financial service providers must disclose a variety of information to federal agencies upon request and must store this data in a format that allows quick retrieval and reconstruction of trade activities in WORM compliant repositories.
  • Provisions of the Act require banks and financial institutions to retain a greater percentage of the risk from securitization of credit. This risk cannot be hedged or transferred to another entity.
  • The Volcker Rule requires some institutions to separate their proprietary trading activities from their regular banking services.

Many of these provisions are incomplete or are still works in progress. For example, the Volcker Rule is expected to go into effect in 2015, despite widespread opposition among leaders in the banking industry. Making sure that your institution is in full compliance with all currently applicable Dodd-Frank requirements is critical to your ongoing success.

Challenges of Dodd-Frank

The sheer length and scope of the Dodd-Frank Act can be intimidating for financial companies like yours. Some of the most commonly reported challenges associated with implementing Dodd-Frank include the following:

  • The costs associated with converting printed records and voice recordings to searchable digital formats
  • The complexity of the regulations included in Dodd-Frank and the added rules imposed by the SEC and the CFTC
  • The undue burden of some regulations on smaller financial institutions
  • Variances in how federal agencies interpret and enforce the provisions of the Dodd-Frank Act
  • Title 17 CFR 23 §23.201-23.204 burden of creating and maintaining record keeping beyond trade reconstruction

Of these challenges, the technological requirements and their costs represent one of the most significant barriers to full compliance with Dodd-Frank. Converting all transaction documentation to a common format and creating secure, searchable, WORM compliant access to relevant records may require an extended period of time and a major financial investment for large and small institutions alike.

[For more information on Dodd-Frank WORM Compliance, check out our blog article]

Preparing Your Firm for Dodd-Frank Title VII Reporting

Title VII of the Dodd-Frank Act requires financial institutions to provide trade reconstruction records within 72 hours of the request for these records and to retain records for at least seven years. To comply with this new requirement, many companies are converting their records to a searchable digital format. SEC regulations require digital records of financial trades to be stored in a write-once, read-many (WORM) format to prevent tampering and to ensure the most accurate records of past transactions. Converting seven years worth of records to WORM-compliant formats can present serious challenges for financial companies like yours. Going it alone may not be the best option, especially given the potential penalties for failing to implement Dodd-Frank requirements correctly.

Understanding and addressing Dodd-Frank compliance issues can present significant difficulties for financial institutions of all sizes. If you’re still grappling with how to comply with the stringent new requirements, viewing the webinar, Preparing your Firm for Dodd-Frank Title VII Reporting, will allow for an in-depth look at the most likely technological and regulatory challenges, and will deliver solid solutions to help your company achieve full compliance with all Title VII reporting requirements. The webinar offers an across-the-board look at the current provisions of Dodd-Frank and the most effective methods for converting and storing financial records in compliance with these provisions.

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Erik Raper

Erik Raper

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Erik Raper heads Paragon’s Marketing and Advisory Services teams across focused industries. In this role, Mr. Raper leads his team to bring deep industry experience, rigorous analytical capabilities and a pragmatic mindset to clients’ most complex business problems. Mr. Raper’s team of marketing and strategy professionals work with Paragon’s Industry Leaders in the development of key go-to-market solutions which align to Paragon strengths and are essential to achieving clients’ business imperatives.

Before being appointed to his current position, Mr. Raper has served several key roles at Paragon including Director of Strategic Solutions Sales, Vice President of Strategy, and leader of Advisory Services. Mr. Raper guided the development of a suite of straight-through-processing (STP) solutions that focused on delivering business value–expanding Paragon’s Fortune 500 clientele and establishing the foundation for the firm’s brand platform: "Improving the Way Work Gets Done."

Prior to his appointment at Paragon in 2004, Mr. Raper spent seven years with Prudential Financial. As a vice president, he was instrumental in leading Prudential through a major operations and technology re-engineering in support of the company’s initial public offering. Preceding his employment with Prudential, he spent seven years with AT&T in various Marketing and Strategic Planning positions.

Mr. Raper holds a B.A. in Marketing from Columbus University, Metairie, Louisiana.

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