The KURE for AML and regulatory reporting headaches

By John Leahy Senior Product Manager
July 13th 2022

Why do you need an advanced anti-money laundering (AML) and FATCA/CRS regulatory reporting solution?

Much is at stake. Any compliance lapses can incur heavy financial penalties. Legal action. Debilitating reputational damage. Violations, intentional or otherwise, will not be tolerated.

The costs of failure are growing. And all financial institutions – from banks and advisors to investment managers (including private equity and hedge funds), trust companies and fund administrators – are under scrutiny.

Regulatory burden keeps getting heavier

Around the world, authorities’ focus on AML and know your customer (KYC) controls is intensifying.

EU legislative proposals announced last year aim to strengthen the bloc’s AML and counter-terrorism financing (CFT) regime. Customer due diligence measures will become more granular. Beneficial ownership rules are to be tightened. “Aiding and abetting” by money laundering “enablers” will be made a criminal offence.

In the US, the Anti-Money Laundering Act 2020, introduced in January 2021, represented the most substantial reform of the country’s AML/CFT laws in 20 years. The provisions include tougher beneficial owner disclosure requirements, along with higher fines for AML violations.

Avoiding the substantial penalties that can ensue from any regulatory reporting failings is a further priority. The Common Reporting Standard (CRS) and US Foreign Account Tax Compliance Act (FATCA) are proving potent weapons in jurisdictions’ war against tax evasion. But the reporting obligations impose a hefty operational cost on the welter of financial institutions caught up in the rules.

Alleviating the compliance workload, associated expenses and risk is now critical to financial institutions’ reputation and bottom line. KURE is our solution.

Software to ease your compliance pain

Deep Pool’s KURE software is designed for fund administrators, investment managers, trust companies, advisors and any other business with AML/KYC compliance and FATCA/CRS reporting responsibilities. Automated, end-to-end visibility and control enable users to run their AML, KYC, onboarding, offboarding and regulatory reporting services scalably and efficiently. And true multi-jurisdictional capabilities cover all your global obligations, ensuring KURE is the only solution you need.

  • Client onboarding

Effective anti-money laundering starts right from the outset of the relationship.

Client onboarding is a complex activity, further complicated by nuances in individual client circumstances and the specific requirements of different jurisdictions. The KURE software automates the entire process and ensures all parts of the onboarding function are fully controlled.

A customisable, risk-based AML/KYC approach enables firms to develop a risk-based picture of prospective clients when performing the initial due diligence. Source of funds/wealth checks, plus advanced investor and beneficial owner screening – able to track complex, multi-level ownership structures to identify and verify underlying customer and beneficial ownership identities, and flag high-risk relationships – are built into the system.

Document checklists help ensure all the required supporting information has been captured. And a secure, centralised document repository serves as a single global investor record store, allowing static data and documents to be shared across regulations and jurisdictions to minimise duplication and the need to contact investors multiple times.

  • Ongoing due diligence

Once clients have been onboarded, ongoing due diligence is an unending requirement with zero tolerance for error. Accounts must be reviewed periodically to ensure documents and data remain current. Any missing/expired documentation needs to be updated. Screening for sanctions and politically exposed persons is ongoing.

KURE automates that effort. Screening and risk profiling monitor for any change in client status, allowing the software users to manage by exception. Real-time activity monitoring for suspicious transactions or behaviours can spot AML risks, trigger automated alerts and block accounts or transactions when suspicious events occur. Any potential issues can then be addressed before they become an actual breach. Where appropriate, suspicious activity reports (SARs) are sent to the relevant regulatory body within stipulated timeframes.

  • Client offboarding

Offboarding is a critical stage in AML compliance and the client lifecycle. KURE’s systematic data retention framework can be easily configured on a jurisdictional basis. Automated processes alert users when retention periods have been reached and action needed. Where purging or masking is required, specific customer data is targeted in a controlled fashion, enabling data controllers and processors to remain GDPR compliant.

  • Tax controls

Keeping up-to-date with different jurisdictions’ tax laws and certification requirements adds a huge burden to businesses. Our software enables users to incorporate local tax laws and evolve with regulatory changes. Automated tax and self-certification form collection and smart validation streamline processes and ensure forms are populated correctly in line with local tax laws. Any change of circumstance or expiration date is flagged for users to action.

  • Regulatory reporting

Investment managers and administrators have an array of regulatory reporting obligations. Reports need to be submitted in XML schema, but the format of the message, document and account reference identifiers required by different authorities vary significantly.

Automatic Exchange of Information-compliant processes for FATCA, CRS and other treaties are embedded in KURE. Reports are generated automatically in filing-ready state, alleviating the risk of non-compliance while removing the need for expensive conversion tools or third-party reporting services.

KURE also tracks indicia such as place of birth, citizenship, address and phone number used to identify clients and determine their tax residency status. The tracking keeps FATCA and CRS statuses up-to-date and is backed by systematic logic to determine where any curative documentation is required. All actions are tracked in the system’s audit tables to enable easy review or investigation.

The compliance software prescription

Complying with the array of complex inter-jurisdictional AML and regulatory reporting rules that firms face today is non-negotiable. But for many financial institutions, it is a costly, painful exercise.

KURE provides the remedy. Its best practice capabilities strengthen user compliance, streamline regulatory reporting processes, boost efficiencies and enrich companies’ service offerings. Exactly the prescription firms need.

ABOUT DEEP POOL
Deep Pool is the #1 investor servicing and compliance solutions supplier, providing cutting-edge software and consulting services to the world’s leading fund administrators and asset managers. Our flexible solution suite, developed by an experienced team of accountants, business analysts and software engineers, supports offshore and onshore hedge funds, partnerships, private equity vehicles, retail funds and regulated financial firms. Deep Pool is a global organisation with offices in Dublin, Ireland, the United States, the Cayman Islands and Slovakia. For more information, visit: www.deep-pool.com.

John Leahy
John has been with the Deep Pool Group since 2012. He drives product development, vision, strategy, and execution across a cross-functional team, serving 3 Fintech/Regtech products. John holds a Postgraduate Diploma in Product Management from Technological University Dublin.