Artificial Intelligence for Asset Management and Investment

Chapter 15Regulatory Compliance and Operations

THERE ARE TWO TOPICS DISCUSSED IN the chapter. The first is about regulatory compliance. The second is about operations.

WHO IS RESPONSIBLE?

The head of regulatory function is responsible for regulatory intelligent automation. The team is placed at the design stage. We are placing operational functions in areas such as reporting and disclosures, institutional support, accounting, and other similar back office under a single discussion umbrella of operations. These activities and functions may be headed by different leaders. Both regulatory compliance and operations intelligent automation are approached from our overall goal of industrial-scale enterprise machine learning.

REGULATORY COMPLIANCE

Regulatory compliance is not just about check-the-box compliance. It is a way of life. It also provides meaningful ways to assess your own performance and provides a comparative basis for others. It is a key component of competitive advantage. A firm that either fails in regulatory compliance or does not adopt ethical standards (such as GIPS) may be viewed as less attractive by investors. Note: some areas of compliance are discussed in Chapter 19.

WHY INTELLIGENT AUTOMATION?

Let us start by evaluating why intelligent automation is the only way forward for asset management firms:

• Diversity of regulations: The world of regulations is broad, highly dynamic, and diverse. Regulations come from many sources, are detailed, sometimes conflicting, ...