Responding to the Evolving Legislation: Dodd-Frank Act

Manage the Resulting Compliance, Risk and Regulatory Intelligence Needs Efficiently

On July 21, 2010 President Barack Obama signed into law the Dodd–Frank Wall Street Reform and Consumer Protection Act. The aim of the legislation is “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”1

The Dodd-Frank Act covers every aspect of financial services. Itcomprises16 titles and entails that regulators create 243 rules, conduct 67 studies, and issue 22 periodic reports. According to the Financial Services Roundtable, this is the largest single piece of financial reform legislation in the nation's history 2. The legislation is based on this large number of studies and reports to be conducted over next two years and implies an estimated 15,000 to 20,000 pages of new rules and compliance requirements for financial institutions.

Dodd Frank Act is evolving with many aspects of the legislation still undefined, many of the reforms and implementation issues still unclear. However, what is evident is that the new regulation implies substantial alterations in the entire business structure of financial institutions including operations, IT infrastructure, corporate governance, internal control frameworks, risk management, tax planning, regulatory and public disclosures, ethics, legal and compliance.

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MetricStream Dodd-Frank Act - Compliance, Risk and Regulatory Intelligence Software Solution

The momentous changes to the authority of the Federal Reserve and the Securities and Exchange Commission indicate that companies need to be more accountable and transparent and they need to step up quickly.

Understanding the new legislation and its implications for financial organizations to upgrade their risk and regulatory compliance capabilities, enhance customer accountability and implement new regulations quickly, MetricStream has aligned its solution to provide a common framework and an integrated approach to manage various aspects and requirements of the new legislation efficiently.

Integrated on the MetricStream GRC platform, the solution provides automated, streamlined and centralized workflows, processes, control testing and reporting requirements specific to the Dodd-Frank Act.

The MetricStream GRC platform has been deployed by several large global to mid-tier financial organizations including central banks, federal financial agencies, asset management firms, retail banks, broker-dealer firms, investment companies, stock exchanges, clearing corporations, insurance companies among several others.

The common platform and centralized information facilitate collaboration among business units and functions and increase transparency of the entire process of managing Dodd Frank Act across the enterprise. The common platform and the capabilities woven around it allow organizations to introduce and foster a culture of increased customer accountability.

Covering various facets of Dodd-Frank Act, MetricStream Solution includes workflows, capabilities and integrated framework for:

  • Complete compliance with Dodd-Frank Act
  • Management of risks arising out of non-compliance with the act
  • Regulatory intelligence for continuous awareness and up-to-date visibility into the new rules, regulations, changes and developments in the legislation
  • Content management to track documentation, policies, certifications, reports that are part of managing Dodd-Frank Act

As Dodd-Frank Act is still evolving, the crucial question for companies is how they are planning to support changes to Dodd-Frank Act, and other regulations for that matter, going forward in the new regulatory environment. MetricStream Solution provides a single repository of out-of-the-box content for process, as well as risk and control libraries where the entire range of risks related to Dodd-Frank Act are listed along with the corresponding controls.

The Solution helps track changes in Dodd-Frank Act along with detailed workflows to identify loop-holes and plug in gaps with remedial actions for closed-loop compliance.

Modules for Managing Dodd-Frank Act
Dodd-Frank Regulatory Content Library: MetricStream Regulatory Content Librarymodule allows banks and financial institutes to continuously monitor regulatory changes in Dodd-Frank Actand provides a centralized repository of entire regulatory content related to the legislation.MetricStream Solution comprises pre-built standard regulatory content, industry standards and best practices to manage Dodd-Frank Act competently. MetricStream Solution also provides other intelligent and content-driven features such as access to training from an expert community within the solution and integration of business processes with notifications and industry alerts. The module facilitates:

  • Efficient organization and management of regulatory content and policies related to Dodd-Frank Act in a cost effective way though a centralized and structured repository
  • Easy and effective tracking of regulatory changes in the legislation using automated alerts and notifications
  • Complete transparency of the Dodd-Frank Act regulatory compliance process
  • Granular insight and real-time intelligence capabilities for the compliance function to view Dodd-Frank compliance levels of the company and strategize accordingly

Dodd-Frank Compliance Risk Control Management: MetricStream Compliance Control Management moduleprovides embedded best practices for meeting regulatory guidelines of Dodd-Frank. With automated information flows, assessments and testing, and remediation assignments, MetricStream solution ensures consistent compliance and controls process across the enterprise eliminating any deviations and errors as well as redundant activities resulting in reduced over-all compliance costs.To ensure complete compliance with Dodd-Frank Act, the module:

  • Provides functionality to manage the scope for risk assessments
  • Maintains a centralized repository of risks, controls, and tests
  • Performs residual and inherent risk assessment as per the scheduled assessments
  • Evaluates the need for an action plan, if a control is found ineffective

Closed-Loop Compliance Gap Remediation for Dodd-Frank Regulations: MetricStream Closed-Loop Compliance Gap Remediation module enables organizations to establish a system to identify gaps and rectify processes that do not conform to the requirements of Dodd-Frank Act. The module includes identification, documentation, evaluation, classification and remediation of such gaps. The gaps are further investigated, responsible entities are notified and remedial action is tracked through automated workflows to complete the closed-loop process. The powerful analytics along with gap tracking and reporting functionality with graphical dashboards give managers complete real-time visibility into the compliance system and provide critical information for reducing the risk of noncompliance.

The module also supports the regulatory reporting and submission process with decision trees that identify gaps and helps:

  • Accelerate systematic gap recording, review and approval cycles as gap incidents automatically move from one stage to the next
  • Reduce repeat occurrence with consistent and closed-loop investigation remedial and corrective action process
  • Improve communication and teamwork on exception cases across departments and functional areas
  • Gain enterprise-wide visibility into the status of gap incidents and track related process metrics

Dodd-Frank Reporting and Disclosures: MetricStream Reporting and Disclosures module provides enterprise-wide visibility into the Dodd-Frank Act compliance management process and highlight high-priority non-compliance risks that need to be addressed. The module provides complete real-time visibility into the compliance data with analytics for trend analysis. Reports for status tracking, scorecards and compliance dashboards can be readily accessed. Graphical executive dashboards and flexible reports with drill-down capability provide statistics and data by a variety of parameters such as business units, processes and divisions.The module provides:

  • Powerful management information system (MIS) capabilities for streamlined reporting
  • Embedded compliance dashboards and heat maps that provide enterprise-wide visibility into the compliance management process
  • Pre-configured standard compliance reports as well as flexibility to configure ad-hoc or scheduled reports

Solution Highlights

  • Complete solution setto support all compliance, risk and regulatory processes relating to Dodd-Frank act
  • Content library to track Dodd-Frank regulatory updates and to ensure complete cognizance and compliance with new rules and corresponding requirements
  • Centralized repository of all information and data related to Dodd-Frank including changes in regulations, evidential documents and related disclosures
  • Identification, documentation and implementation of changes to address evolving Dodd-Frank requirements followed byclose monitoringof compliance
  • Closed-loop gap remediation process to ascertain and manage gaps or loop-holes in processes to manage Dodd-Frank compliance

MetricStream Enterprise Compliance Platform

  • Web-based architecturewith easy-to-use interface: Highly intuitive user interfaces and well-defined navigation standards minimize the learning curve, and ensure quick adoption of the MetricStream solution. Users are able to easily monitor risks and controls, quickly access contextual information, and intuitively visualize the relationships between processes, risks, controls, regulations and policies.
  • High degree of flexibility: MetricStream provides out-of-the-box functionalities based on industry standards and best practices. It also provides tools to configure and model the solution to each organization’s specific business requirements. Reports, forms, fields and workflows can be rapidly created and modified to suit business needs and rules without any programming or coding. The solution also provides the flexibility to be integrated with various existing internal / external systems and programs.
  • Embedded Dodd-Frank best practices: Ready-to-use best practices are built into MetricStream Solution. This out-of-the-box content is integrated with workflows and business processes along with notifications and industry alerts to ensure their incorporation for successful compliance.

MetricStream Value Proposition

  • Improve accountability in Dodd-Frank compliance program through collaborative workflows
  • Increase transparency of Dodd-Frank compliance program
  • Facilitate collaboration in existing risk and compliance programs
  • Identify, track and document Dodd-Frank regulatory updates
  • Ensure enterprise-wide awareness about the Dodd-Frank Act and its requirements
  • Track and implement changes in Dodd Frank rules and requirementsand comply with them
  • Ascertain and manage Dodd-Frank compliance gaps through a closed-loop remediation process
  • Monitor and confirm ongoing compliance with Dodd-Frank Act requirements
  • Leverage out-of-the-box content in the form of process/risk/control libraries
  • Search for pertinent data using a single repository
  • Maintain a centralized repository of all Dodd-Frank regulations, evidential documents and related disclosures
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