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September 30, 2021

illumis Compliance Product Update: Political Contribution Certifications

We’re continually updating our political contribution compliance platform to better serve our customers. We’re excited to highlight the newest functionality in our latest feature update.

The new “Certifications” tab in the platform enables you to deploy and track employees’ certifications of their political contributions in the illumis system. By adding the certifications functionality, the platform can help your workflow around political contributions — allowing you to monitor and report on their preclearance requests, contributions, and attestations all in one place.

With the new update, you’ll be able to send out a certification form to your employees - including their preclearance requests, and allowing them to attest to any political contributions they have made. You’ll also be able to use the feature for other certifications as well.

If you have any questions about this new functionality or would like to set up a time to connect with our team, please send us an email at solutions@illumis.com!
Why real-time data is essential to helping your investment firm avoid violating pay-to-play regulations, SEC rule 206(4)-5

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.

Beyond SEC Rule 206(4)-5: A look at state and local political contributions compliance regulations

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.

Aligning pay-to-play rule 206(4)-5 compliance practices with your investment firm’s regulatory compliance program

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.