December 6, 2022

Learnings from the midterm election: Why political contributions compliance is more critical than ever

Did you know? Funding for the 2022 midterm elections reached a whopping $9.3 billion. A number which, for those of you keeping track, surpasses the 2018 election by $2 billion.

For those on the receiving end of the donations, that number is great. However, for those financial firms who rely on government contracted work and are, therefore, subject to the Securities and Exchange Commission (SEC) pay-to-play rules in addition to other federal, state and local regulations, it can be more than a little worrisome.

Why? More contributions mean more opportunity for risk of noncompliance.

Using a political contribution monitoring technology to comply with the SEC pay-to-play rule

In previous elections, manually verifying and monitoring your covered associated political contributions may have been a feasible option, however, with the steep increase in quantity of contributions being made and the monetary value of those contributions, the task has become near impossible. Not to mention, the bevy of pay-to-play regulations requiring various reporting and verification from your firm.

With so much on the line, many financial firms have turned to automated solutions to help ease the burden of tracking and monitoring. Think a political contribution monitoring technology could be the answer to your pay-to-play headache? Here are a few benefits of automation:

  1. Real-time data sourcing.
  2. Aggregated information from hundreds of public data records.
  3. Aligned preclearance and verification processes and workflows.
  4. Monitoring and alerts to notify you of any irregularities or possible compliance violations.
  5. Thorough reporting and analytics.

Whether your firm must comply with SEC Rule 206(4)-5, Financial Industry Regulatory Authority (FINRA) Rule 2030 & 4580 or any of the other myriad of federal, state and local regulations, automation powered by real-time data is the answer. Ready to see why illumis is the best-in-class technology to support your firm’s political contribution verification? Schedule a demo today!

compliance updates

Short answer. Yes.

Employee political contributions compliance, otherwise known as pay-to-play compliance, remains a core compliance challenge both in on and off election years. While major elections, like we saw in 2022, draws in more excitement and awareness, your employees are likely contributing to their political parties’ years round, every year.

compliance updates

We may just be wrapping up the final run-up elections for the 2022 midterm year, but for financial advisory firms subject to pay-to-play regulations such as the Securities and Exchange Commission (SEC) Rule 206(4)-5, the regulatory ramifications are just getting started. As was made obvious in 2022 with the SEC’s fines and penalties reaching a recording breaking $6.4 billion, the Division of Examinations is making strides to ensure firms are regarding rules, regulations and penalties with the necessary level of consideration.

compliance updates

Pay-to-play rules and regulations, including the well-known Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC) pay-to-play-rules, have become a focal point for compliance teams navigating the midterm elections in 2022. However, even in off years, or years with no major elections, for those firms who rely heavily on government contracted work, political contribution compliance can’t just turn off.