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April 14, 2023

ComplySci and illumis: Two regulatory compliance solutions joining together to benefit clients’ regulatory needs

In November of 2021, ComplySci announced the acquisition of illumis, a premier data aggregator and technology provider whose solutions are used by financial services firms to identify and mitigate risk from employee political contributions. While the initial acquisition saw the firms operating as two independent organizations, we are thrilled to announce the merging of the illumis and ComplySci brands. With this initiative, we aim to arm our clients with a more comprehensive solution to mitigating compliance risk, which includes the increased risk associated with employee political contributions.

Clients of both organizations have, for some time, seen the benefit of the two partner firms. However, by officially merging the two brands, and creating ComplySci’s Political Contribution Compliance – powered by illumis, we aim to bring a more cohesive solution to market, one which will effectively support firms in their endeavor to monitor and mitigate risk.

As COMPLY CEO Amy Kadomatsu said, “At a time when more Americans are engaged in the political process, the task of monitoring and mitigating the regulatory risk associated with employee political contributions is more complex than ever. Financial services firms – more than firms in almost any other sector – are in the crosshairs of regulators trying to root out pay-for-play in public contracts, and these firms need technology that will enable them to identify contributions as they happen in order to quickly take action to manage and mitigate risk. illumis provides the premier solution available to the financial services sector, and we are thrilled to add the illumis team to the COMPLY portfolio.

Learn more by visiting the political contribution monitoring page on ComplySci.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.