Sensitive Industries Monitoring and Automation

Automated, flexible software module solves crucial industry classification and rules challenges enabling accurate sensitive industries monitoring and compliance across multiple regulators and jurisdictions. The module is an integral part of the broader Global Shareholding Disclosures solution.

Concentration of Investments in Sensitive Industries

Regulatory bodies establish rules in designated industries to monitor equity concentrations in order to protect sectors from undue outside influence. Key industries include banking and insurance, defense, mining, media, aerospace, and gaming. Investment management firms are duty bound to comply with all regulatory limits. Challenges include:

  • Sourcing rules across multiple regulators/jurisdictions and over reliance on outside counsel for interpretation
  • Incorporating relief or pre-approval limits into the threshold monitoring process

  • Identifying issuer parent/affiliate relationships and tagging them to multiple industry classifications
  • Observing statutory thresholds that cannot be breached

Multiple Rules, Heightened Activity

With increased trade protectionism and rules tightening brought on by Covid-19, sensitive industries investment rules are becoming more stringent and multiple regulatory bodies often create complex and overlapping rules.

There is no standardized rule set that firms can reference across industries and jurisdictions.

Industry Classification

To monitor their holdings accurately, firms must solve the industry-classification challenge by uncovering sensitive industries embedded in a target investment’s parent-subsidiary corporate structure.

Furthermore, firms need access to granular industry classification data to ensure mandated rules are correctly applied.

Learn more about AxiomSL’s Global Shareholding Disclosures solution

AxiomSL’s Sensitive Industries Monitoring and Automation Module

AxiomSL’s Sensitive Industries Monitoring and Automation enables the identification and tracking of shareholdings across multiple regulators and jurisdictions

Classification Clarity | Extensive Coverage And Alerts

Informed by continuous feedback from AxiomSL’s global shareholding client community

EquityView extensible data dictionary architecture enhanced with a new industry classification methodology

Rules engine underpinned by a curated library covering more than 600 rules across 80 jurisdictions from aosphere’s (an Allen & Overy LLP affiliate) Rulefinder SD

Notifications delivered on sensitive industries-specific event types including relief or pre-approval

Sensitive Industries Monitoring Features

New Classification Methodology

AxiomSL’s approach incorporates crucial parent-child subsidiary relationships in a unique classification methodology driven by rules.

Captures information from multiple industry classification sources such as GICS, TRBC, and NAICS.

Enhanced Notifications

The module’s engine calculates beneficial ownership percentages based on thresholds stipulated in the rules.

Generates notifications including client parameterized proximity threshold warnings, pre-approval and prohibited/restricted breaches, and crossed threshold alerts.

Expanded Rules Coverage

Curated library of over 600 rules across more than 80 jurisdictions leveraging aosphere’s legal memo feed.

Clients have the control and flexibility to override or originate rules to suit specific business case needs for sensitive industries monitoring and automation.

Relief/Pre-Approval Management

Users can configure the relief management process; dashboards provide visibility into thresholds and expirations.

Clients can also configure compliance elements that impact how rules are applied such as foreign vs. local investor or FBO vs. non-FBO status.

Extensible Data Dictionary

The EquityView data architecture for global shareholding disclosures facilitates mapping datasets across legal entities, position source systems, and market data sources.

Includes optional access to Refintiv market data attributes via an adaptor.

Efficient Cloud Deployment

A fully managed, secure RegCloud deployment ensures AxiomSL shoulders the burden of rule maintenance globally.

(Alternatively, the module is deployable on-premises.)

Key Benefits

Client community guides assumptions and provides continuous-improvement feedback ensuring industry-standard best practices

Proximity checks and dashboards inform compliance and monitoring teams and enable proactive portfolio adjustments

End-to-end data management and monitoring capabilities deliver current and historical datasets for successful audit defense

Leveraging multiple industry classification standards ensures accurate issuer pre-mapping, reducing risk and maintenance overhead

Flexible rule creation capability enables firms to incorporate their unique business and investment scenarios, and manage regulatory relief

RegCloud deployment delivers operational efficiencies enabling firms to concentrate resources on investment oversight and control

Related Insights

Important Considerations for Sensitive Industries Monitoring and Automation

Should we be excluding external client holdings from principal holdings in our position aggregation?

Are we considering equity derivatives as in-scope for sensitive industries monitoring?

How are we deciding whether to bind an issuer to a regulator/state threshold?

How are we prioritizing jurisdictional logic: home member state vs. country of incorporation, etc.?

Are we able to uncover additional industries hidden within the parent-subsidiary relationship?

Are we able to track our pre-approval process from inception to expiry?

Global Shareholding Disclosures

Learn more about AxiomSL’s Global Shareholding Disclosures solution

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