October 28, 2019

Introducing Preclearance

We’re excited to announce we’ve added a streamlined, fully-customizable preclearance tool to illumis’ political contribution monitoring solutions. Our preclearance feature ties political contribution preclearance data and monitoring data together in a single workflow for the first time, enabling significant automation to save time and improve processes for compliance teams across the financial services industry.

With increased media and regulatory attention on pay-to-play violations, many of our clients already require advisers and other covered individuals to preclear contributions they or members of their household make. Now, we’re letting compliance teams pair that preclearance alongside the most comprehensive political contribution monitoring available to create one streamlined workflow.

Here’s how it works.

When Nicole, a vice president for compliance, clicks on the Preclearance tab, she can see all of the contributions that employees have submitted for preclearance at a glance. illumis provides an easy-to-use submission form—that can also be easily embedded into an intranet—to help populate this section. Nicole can also manually enter preclearance requests.

From there, Nicole can change the status of preclearance requests. In our example, she uses the statuses “Approved,” “Rejected,” and “Needs More Information.” She can customize these labels to fit her firm’s workflow.

When Nicole changes the status of a request, she’ll be asked if she wants an automated email notifying the employee to be sent. The text of these emails is also completely personalizable, and Nicole can choose to change the status without sending a notification as well.

Tying Data Together Is Game-Changing

While the platform is cleanly-designed, highly customizable, and efficient, the real innovation here is tying together the preclearance and monitoring data.

Traditional compliance workflows have relied on self reporting of information through attestations and preclearance. But that’s beginning to change as more and more firms are taking a belt-and-suspenders approach and implementing testing solutions and forensic approaches to compliance.

But tying those separate data flows together takes a lot of work. By pulling them together in one place, the platform will be able to automatically reconcile records, focus and filter alerts, and improve reporting.

A New Tool For A Powerful Platform

illumis provides the most comprehensive and accurate campaign finance data available - drawing from hundreds of public data sources, including federal data, all 50 states and D.C., and hundreds of cities, counties, and local jurisdictions. With the power of public data and new time-saving tools like integrated preclearance, illumis helps companies maintain compliance with federal, state, and local pay-to-play regulations and avoid costly risks like regulatory penalties, sanctions, lockout periods, and negative media attention.

We are continually adding new data sources and features to make the workflow as effective and efficient as possible. We designed and customized the preclearance tool in collaboration with many of our clients. We’d love to share more, and see if the platform might be a good fit for your team. If you’d like more information, please contact us using the form below.

Please Note: This post was updated in June 2020 to reflect our company’s new name: illumis

Political contributions made by firm employees pose a significant threat to investment advisory firms. And even firms with the best compliance teams can be at risk of violating pay-to-play regulations, like the Securities and Exchange Commission’s (SEC) rule 206(4)-5, given the complexity of the rules and the myriad of regulations to which firms must comply.

Because of this, investment firms must arm themselves with the access to and support of real-time data, which can help identify potential violations and anomalies in the political donation process.

By leveraging real-time data, investment firms can quickly detect suspicious or unauthorized activities and take prompt action to prevent pay-to-play violations.

SEC Rule 206(4)-5 is arguably the most well known regulation regarding political contributions compliance or pay-to-play compliance. However, it certainly isn’t the only regulation to which firms must comply.

In fact, beyond federal regulations, firms which take part in government contracted work must contend with numerous and varied state and local regulations as well. Such regulations present unique challenges because of the various requirements within each, which should they be neglected, can cause significant financial and reputational damage.

While it would be almost too easy to treat the Securities and Exchange Commissions’ (SEC) pay-to-play rule 206(4)-5 as a special requirement implemented only during election years, that mistake can cause serious, firm-wide damages. In fact, for investment firms, establishing a compliance program which actively and regularly incorporates compliance with the SEC pay-to-play rule is essential to avoiding fines, sanctions, lockout periods, loss of revenue and a damaged reputation.