Financial Technologies Forum – October 28, 2014 – AxiomSL, a provider of regulatory reporting and risk management software, has unveiled a solution that “computes haircuts,” to comply with the SEC’s regulatory capital and reporting rules for securities broker-dealers, the company says.
The solution “assures transparency, traceability and auditability enabling securities broker-dealers to source, calculate, analyze, and generate reports to meet compliance requirements of internal and external stakeholders,” according to the vendor.
The AxiomSL solution “provides a range of functionalities to empower respondents to meet the examination requirements of [SEC] Rule 17a-5 while performing standardized capital computations including netting and optimization of capital,” officials say. The solution is intended to optimize the search for the lowest “capital haircuts with full traceability of data, rules, calculations and analysis,” the company adds.
The AxiomSL system consolidates workflow processes and controls, can help reduce internal cost, and can be deployed across the firm, Alex Tsigutkin, AxiomSL’s CEO, says in a statement.
The SEC’s rule 17a-5 and related rules, most of which are or will soon go into effect, amend “certain broker-dealer annual reporting, audit, and notification requirements,” according to the SEC, including a “requirement that broker-dealer audits be conducted in accordance with standards of the Public Company Accounting Oversight Board (PCAOB) in light of explicit oversight authority provided to the PCAOB by the Dodd-Frank Wall Street Reform and Consumer Protection Act.”
The amended rules also require a “broker-dealer that clears transactions or carries customer accounts to agree to allow representatives of the [SEC] or the broker-dealer’s designated examining authority (DEA) to review the documentation associated with certain reports of the broker-dealer’s independent public accountant and to allow the accountant to discuss the findings relating to the reports of the accountant with those representatives when requested in connection with a regulatory examination of the broker-dealer,” according to the SEC.
“Finally, the amendments require a broker-dealer to file a new form with its DEA that elicits information about the broker-dealer’s practices with respect to the custody of securities and funds of customers and non-customers,” say SEC officials.