Research Management that’s Compliant by Design

Modern RMS and Why the Second Mouse Gets the Cheese

One of the most common questions we hear from Fund Managers today is “How do we build compliance into our research process, without hampering productivity or workflows?”

Despite all the proven productivity benefits of Research Management Systems (RMS), there’s no denying that compliance remains one of the main drivers for investing in a formal RMS today. Which means funds should no longer settle for anything less than a compliant foundation from the outset, and should expect RMS to have “built-in” compliance capabilities to meet today’s regulations for record-keeping, data management, cybersecurity and more.

However, when it comes to research and idea generation, you can’t afford for compliance procedures to restrict analyst performance. Doing so actually has a negative impact on your compliance and security posture as well as your bottom line.

The right research management approach will not only satisfy research compliance demands for your fund from the outset, it should also support analyst workflows and enhance productivity.

A central research management system that doesn’t get used or populated with content, is not compliant. In fact, it’s barely a centralized research management system.

So when funds consider technology that is ‘compliant by design’ it’s important not to overlook the user experience design as a crucial part of that. An RMS designed for compliance will enable the following:

  1. Meet (and anticipate) industry compliance regulations
  2. Simplify compliance processes, auditing and reporting
  3. Enable (rather than restrict) investment professionals

Growing funds often find themselves at a distinct advantage here. With no legacy research management systems in place, years of data silos to deal with or historic workflows to disrupt, they’re in an enviable position to build-in compliant, efficient best practice from the outset with modern research management software that can scale and grow as you do.

You’ve heard the old adage the early bird catches the worm, well when it comes to compliant, agile, research management practices the term ‘second mouse gets the cheese’ may ring more true.

As the speed of regulatory change quickens and fees tighten, those hampered by cumbersome, first generation legacy IT systems and processes struggle to keep pace.

Earlier this year, the OCIE’s 2017 priorities specified that it is expanding the Never-Before Examined Adviser initiative to include focused, risk-based examinations of newly registered advisers as well as of selected advisers that have been registered for a longer period but have never been examined by OCIE.

Of course, the OCIE do not intend the examination process to be a fraught with stress and sweat, but they do intend it to be thorough. The requirement to consolidate research assets, and ensure a single system of record for your research is an increasingly common recommendation for early stage funds coming out of their first SEC examinations.

For funds yet to be examined, just like their more mature counterparts, this is no time to turn a blind eye to compliant pre-trade research operations.

We all know the industry’s legal and compliance risks have greatly increased, and we all know why. We also know that the hoops you need to jump through to demonstrate transparency keep moving and multiplying. With all the risk management concerns facing fund managers today, adhering to research management best practices for compliance really shouldn’t be one of them.

If you’d like to discuss your approach to compliant research management or how Bipsync’s modern Research Management Software can support your fund’s security posture, get in touch.