Successful Implementation of the Dodd-Frank Act Volcker Rule in Record Time
A new Chief Compliance Officer at a leading regional financial institution had less than one year to implement the Dodd-Frank Act Volcker Rule compliance program. Failure would have negative consequences for the institution and could result in regulatory enforcement action.
Solution
We assessed the risk of Volcker Rule to the institution, established controls and processes designed to ensure compliance with prohibitions against proprietary trading and ownership of covered funds, and developed a strategy for ongoing oversight of compliance with the Volcker Rule and facilitation of the annual attestation of compliance to regulators by the compliance date.
- Established a governance and oversight structure consisting of key stakeholders to oversee implementation, address implementation risks, and decision issues.
- Working with the lines of business, identified and analyzed all activities and transactions across the enterprise to determine the scope of impact of the new regulation. Performed a comprehensive gap analysis of systems, processes, controls, policies and procedures, training, and personnel to understand material weaknesses to be addressed and risk mitigation strategies to be developed.
- Redesigned existing activities and transactions to conform with the new rule, created a centralized function (Volcker Compliance Program Office), and a permanent governance structure to provide ongoing oversight of the compliance program.
- Designed, developed, and implemented technology solutions to facilitate ongoing assessment of activities and transactions and annual compliance attestation.
- Developed processes, controls, policies, and procedures, including risk management metrics to monitor activities and transactions for compliance and escalation protocols for instances of noncompliance.
- Designed, developed, and deployed an enterprise-wide training program to employees.
Impact
- Delivered a major professional win for the new CCO with the executive team.
- Avoided an estimated $20 million in potential regulatory fines that would have resulted in the absence of a reasonably designed compliance program.
- Applied our client-first approach at record speed to save the firm from regulatory criticism and fines, improve operational efficiency, and reduce costs.