User Guides: Case Studies

AUDIT GUIDELINES

Client

A division of the Securities Industry Association (SIA)

Engagement
As a benefit of membership, the SIA offers audit guidelines that outline specific steps associated with auditing various functions within a typical investment bank. These guidelines identify risks along with potential controls and offer suggested audit work steps. The client utilizes a combination of members and other subject matter experts to develop and/or update guidelines that address an evolving list of topics and functions.

Deliverable
We were engaged to review the list of guidelines for areas of update or development and to identify those that were in our purview of current industry knowledge and expertise. We identified over 20 topics that are within our area of competence. We created 26 new and updated six guidelines, including Anti-Money Laundering and Electronic Funds Transfer. 

Result
Our client retains members, as well as attracts new members, by providing a tangible benefit that members can use every day in executing their responsibilities. Using a combination of members and external resources permits the division to address the current and new needs of the division, membership, member firms and indirectly contribute to the safety of the industry.

CLEARANCE & SETTLEMENT

Client:
Clearing service provider subsidiary of an investment bank

Engagement
We were asked to create documentation for a new clearance and settlement system for the client’s non-clearing customers. Since we were engaged during the planning stage, we were able to make critical system design recommendations.

Deliverable
The scope of functions spanned from trade execution through settlement and asset servicing. Based on the development process, documentation was created during the design phase with deeper and more comprehensive details recorded during development and user acceptance phases.
Our initial role was to “scribe” the major components and create a “big picture” of the system flow including reference data, client profile, external interfaces and points of risk mitigation. As the modules were designed and additional details identified, the documentation became more granular with appropriate details for screen and report content.

Result
The new system was implemented in phases to minimize disruption and limit potential system outages. The implementation was completed in seven months. The client realized the increased capacity and operating cost savings within 24 months. In addition, they experienced a lower loss of customers than expected during the development and implementation phases.

COMPLIANCE MANUAL

Client
Regional brokerage firm

Engagement
While reorganizing its in-branch operations functions, our client conducted a proficiency audit. The Chief Operations Officer was dismayed to discover that various updated compliance procedures were unevenly used and in some locations, updates were completely overlooked.

Deliverable
We developed an Annual Compliance Update certification program for branch management, administration and operations personnel. Using a combination of print materials, simulation exercises, and on-line case studies, we created a battery of certification devices that could be accessed by the organization “on demand” for incumbents, new hires and functional groups, as necessary. On-line certification was required annually for specified employees. In addition, we rewrote the Compliance Manual for the firm, incorporating all existing compliance updates. The new manual was then made available via the organization’s intranet.

Result
The firm reported a reduction in regulatory fines in the subsequent year. We were asked to maintain the new on-line manual on an on-going basis, including annual updates to all certification materials.

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