PROTEGENT SURVEILLANCE

PROTEGENT SURVEILLANCE

PROTEGENT SURVEILLANCE OVERVIEW Efficient enterprise-wide surveillance solutions to help you detect, prevent and document potential regulatory violations. Drawing from over a decade of intellectual capital, Protegent Surveillance has maintained its commitment to protecting sell-side retail brokerage firms from the mounting requirements mandated by global regulatory bodies such as FINRA, SEC, NAIC and ESMA. More than ever before, firms need an efficient enterprise-wide surveillance tool to transform the challenges of increasing costs and compliance into a combined solution. The user dashboard provides a broad statistical overview of all critical alert trends and statuses. SunGard s Protegent Surveillance assesses transactions and account data to detect & prevent potential issues. As an intuitive automated supervision system designed to detect, prevent and document potential regulatory violations, Protegent Surveillance is the premier solution provider for firms trade and account review processes against regulatory and firm-defined guidelines. With over 160 configurable alerts in its library, Protegent Surveillance detects a broad range of issues including; commissions, concentration, suitability, licensing, breakpoints, AML, restricted holdings and many others. Alert parameters and thresholds can be modified easily through the user interface to achieve focused results. As regulatory agencies continue to issue new rules, Protegent Surveillance integrates these into its rules logic engine to help its users mitigate internal and regulatory risk. Products covered include: Equities Options Fixed income Mutual funds ETFs Structured Products Futures & Commodities Fixed and variable annuities Equity indexed annuities Term and whole life Protegent.marketing@sungard.com 1

INTEGRATED COMPLIANCE-CENTRIC SOLUTIONS Protegent is committed to servicing the unique needs of the compliance professional. SunGard s Protegent Compliance platform enables compliance users to manage surveillance and monitor tasks across functions using integrated functionality and common components. Because Protegent Surveillance is a specialized module available through the Protegent Compliance Platform, users are able to take advantage of core functionality in addition to the functionality specific to Protegent Surveillance. Of these components and functions, the most relevant include but are not limited to: Case Management Compliance processes can overlap whereby an issue detected from one perspective of a firm s business oftentimes has implications to another. SunGard recognizes this fact and has incorporated workflow capabilities into the Protegent Compliance Platform that tightly integrates and transcends across individual applications within the platform. Features such as concurrent routing and status definition allow ample flexibility to enable dynamic and pre-defined workflow along with requisite audit trail. The Protegent Compliance Platform also supports capture of exhibits (e.g. file/document attachments) that help create efficiencies in tracking reference information without the need to keep information outside of the platform. Because case management is fully integrated across the platform, workflow can be attributed to other outputs or components within the platform such as ad hoc reports and system reviews. Cases can be grouped for bulk tracking and resolution. Users may also manually create cases to track findings detected through their own surveillance efforts. Ad-Hoc Reports create and customize reporting that spans across the entire data model. Possibilities include the potential overlay of third-party data models enabling cross-data model reporting. Synapse Toolset The Synapse Toolset includes the workbench, surface and shop tools. The toolset provides users the ability to customize the solution via the rule logic functionality. This includes such customization as amending delivery baseline rules, enhancing the data model and editing the user interface screens. Roles and User Hierarchy Protegent provides the ability to support multiple branches across several jurisdictions with one single installation through its flexible roles-based user and hierarchy configuration. Dashboard Reporting Reporting capabilities wouldn t be complete without an integrated dashboard component. The dashboard reporting feature leverages the ad hoc report generator to display any report as a report widget on a user dashboard. Dashboards can be created and shared globally across roles, or be kept private for personal use. Users are not limited to the number of dashboards they can view and have full control over the number of widgets displayed and their location on the screen by using drag and drop technology. Users are able to further configure dashboard widgets by applying filtering capabilities that allow the user to dissect the information being presented via the widget. 2 www.sungard.com/protegent

TRADE REVIEW The Trade Review module is designed to facilitate T+1 sales practice analysis. A supervisor can retrieve trade blotters and reports on client profiles, transactions and accounts in order to access suitability-based, ethical and quality of practice exceptions. Trade Review provides sales practice analysis for immediate detection of potential violations to regulations and/or firm policy. Each trade is subjected to thorough analysis using the Protegent Surveillance Rule Library to detect potential violations. A score is assigned to the trade based on the triggered rules that help indicate severity of the issues associated with the trade. Extensive filtering capability and watch list definitions can be built, saved and shared within the application, enabling users to slice and dice the data as needed. Flexibility to dynamically create many different views empowers users to focus on areas of concern and readily respond to regulatory inquiries. Features and benefits Assists firms with mitigating regulatory risk by keeping pace with regulatory changes Improves supervisory procedures by identifying questionable transactions and providing a consistent review process Enhances operational efficiencies by aggregating compliance reviews and reducing time spent on daily transaction reviews Provides consistent suitability reviews across all product types Trade review Trade risk analysis Excessive commissions Concentration: security, low-priced security, high-yield bond Suitability: age, risk tolerance, time horizon Rep licensing checks Mutual fund breakpoints Restricted holdings Trade analysis results Transaction analysis results are displayed on an electronic trade blotter, sorted by risk level using a yellow and green scoring metaphor. The results can be further filtered and sorted on numerous data points, such as status, client age, product type, commission amount, and trade date. The workflow and case management processes within Protegent Surveillance provides the means to review, annotate, escalate, approve/resolve and memorialize trade-related issues and supervisory actions to help firms manage their risk. Standard reports Standard reports allow the user to analyze information over time and view reports on trends, patterns and violations at an aggregate level. Baseline reports help identify firm trends by alert category, by alert severity and by trader. These reports can be used to identify case management progress or problems based on resolution timeline and progress within firm-defined processes. A set of standard reports are available to download in Excel, PDF, XML, or delimited text formats as well as being accessible online. Any standard report can also be added to the user s configurable dashboard. Protegent.marketing@sungard.com 3

ACCOUNT REVIEW The fully integrated Account Review module expands the capabilities of the core trading supervision solution by including daily account monitoring and a monthly risk ranking of the firm s accounts. With the Account Review module, compliance and surveillance personnel have the tools to automate analysis of concerning account conditions, based on historical transaction activity, current positions, balances and client profiles to measure and rank account risk above and beyond daily trading activity. Daily Account Review The Daily Account Review module monitors accounts regardless of daily trading activity. The module provides analysis designed to detect potentially risky conditions at the account level, as well as concerning patterns and trends. Issues are flagged once at the account level, and remain active until the condition clears or the analysis is scheduled for reevaluation based on firm configuration. Account Risk Ranking Account Risk Ranking, executed on a monthly basis, extends the daily account review to a holistic view across the account. Risk factors are analyzed to calculate an account s overall risk score. This score highlights accounts that contain multiple small problems that individually do not appear to be significant, but may become candidates for additional scrutiny when viewed in the composite. Account risk scores are compared and accounts are ranked among similar or peer group accounts according to their level of risk. Account Review Features and benefits Provides a level of analysis above individual transactions, historically across the account Measures the convergence of account risk factors, highlighting high-risk accounts Detects patterns and trends in accounts Provides a composite view of all account exception conditions and assigns risk ranking scores to convey potential risk to the firm Expedites review process for compliance personnel through workflow and issue tracking Provides targeted review, analysis and reporting through saved and shared filters Allows rule parameter thresholds to be modified to achieve focused analysis and results Account risk analysis Account concentrations: security, industry Portfolio risk Market value loss Missing profile data Managed account analysis Trading inactivity, active account analysis Commission velocity, turnover, gain/loss Cash distribution, liquidation, margin Managing and mitigating risk results Account analysis results are displayed on an electronic account blotter, sorted by risk level using a yellow and green scoring metaphor. The results can be further filtered and sorted on numerous data points, such as status, account balance, account loss, turnover and velocity. The workflow and case management processes within Protegent Surveillance provides the means to review, annotate, escalate, approve/resolve and memorialize account-related issues and supervisory actions to help firms manage their risk. 4 www.sungard.com/protegent

WITH PROTEGENT SURVEILLANCE, FIRMS CAN DETECT SUSPICIOUS TRADING ACTIVITY AND ADDRESS SUPERVISION AND SUITABILITY REQUIREMENTS.

REP REVIEW The Rep Review module of Protegent Surveillance provides a unique perspective by putting the registered representative and their book of business as the focus of attention. The module consists of two components each designed to enhance the firm s ability to understand and monitor their rep population. Rep Rank The Rep Rank component is an automated rules-based analysis that extends beyond trade-by-trade or account-by-account review to a holistic view across the rep s book of business. The outcome is an assessment of the registered representative that can help identify existing patterns and potential risk trends across their book of business related, but not limited to, suitability, fraud, undue risk, sales practices and licensing. Rep Rank is executed on a monthly basis and provides an aggregate risk score that highlights high risk reps. It uncovers situations where there are multiple small problems which, individually do not appear to be significant, but when viewed in the composite may uncover potential risk exposure. Rep Rank risk scores are compared and reps are ranked against their peers within the firm to determine their overall as well as relative level of risk. Features and benefits Provides a level of analysis above individual account and transactions across the entire book of business Measures the convergence of risk factors, highlighting high-risk reps Detects patterns and trends across the rep s entire book Provides a risk score and peer ranking of reps across the firm Maintains and tracks relevant rep information within a consolidated system Rep Inquire The Rep Inquire component facilitates the capture and storage of extended profile information on the registered representative providing a single consolidated view into rep details such as: Addresses Phone numbers Email addresses Rep codes Licenses and registrations Customer complaints Outside business activities Outside accounts Education Training and certifications This data repository for rep-centric information allows users the ability to track information commonly stored in disparate systems. Powerful filtering capabilities enable users to pinpoint specific reps that meet user-defined criteria. The Inquire module also provides a number of reports which analyze the rep s book by providing a breakdown of statistical cross sections. These reports provide powerful insight into how the rep manages their client base and the potential risks that might otherwise go unnoticed. HIGHLIGHT REP BEHAVIOR Account concentrations: client, security, industry, product Market value loss Profiles issues: missing data, address duplication, frequent change Production mix Trading activity patterns Foreign accounts 6 www.sungard.com/protegent

ANTI-MONEY LAUNDERING The Anti-Money Laundering (AML) module includes analysis to detect transaction patterns indicative of potentially suspicious activity in conjunction with a customer s profile (KYC) based on the USA Patriot Act and Bank Secrecy Act guidelines. Red flag conditions identify circumstances warranting further due diligence as required under current AML rules and regulations. Workflow and issue tracking support documentation from inception to resolution. With the AML module, compliance and supervisory personnel have the tools to automate surveillance of accounts, positions, balances and transactions to identify suspicious activity. AML Summary Screen Features and benefits Expedites review process for compliance personnel by highlighting high-risk issues associated with money movement Provides composite view of all exception conditions around AML analysis Detects patterns and trends in accounts as they relate to suspicious activity Analyzes account characteristics such as PO box, net worth and income relative to activity Allows rule parameter thresholds to be modified to achieve focused analysis and results Provides workflow and case management AML conditions Increased activity Wash transactions Structuring Employee fraud Suspicious account activity Low price security frequency New account review Deposits relative to income and net worth Analysis results AML Detail Screen AML analysis results are presented in a summarized view and relevant supporting details are captured to provide historical reference. The account blotter provides details on the exceptions for the firm s accounts using the red, yellow, green scoring metaphor. The results can be filtered and sorted on numerous data points. The workflow and case management process within Protegent Surveillance provides the means to review, annotate, escalate, approve/resolve and memorialize account-related issues and supervisory actions. Protegent.marketing@sungard.com 7

AUDIT The Audit module provides senior management and authorized supervisors the tools they need to perform remote field audits and sales practice reviews across the organization. Protegent Surveillance s Audit module provides a consolidated view of firm-wide client positions, balances, transactions, and activity statistics, aggregated across the organizational hierarchy. This information allows sales managers to identify potential sales practice issues, perform peer reviews, execute remote field audits, identify revenue opportunities, spot high-risk areas and detect patterns and trends to support coach and counsel sessions. From one consolidated location, current account positions and balances, historical transactions and other statistical data are aggregated and viewable at all levels of the firm s defined organizational hierarchy, as well as at the individual account level. Audit Holdings This all inclusive, yet delineated presentation of data allows supervisory personnel such as branch managers and regional directors to zero in on potential problem areas and engage in coaching and counseling sessions with registered representatives. It allows management to focus on overall performance of reps, branches and regions. Protegent Surveillance s auditing features greatly increase the firm s ability to monitor and improve compliance, supervision and risk management throughout the organization. Features and benefits Enables remote field auditing and risk management Expedites best practice reviews Creates a culture of compliance Significantly reduces time involved in conducting full sales practice review Improves supervisors ability to recognize potential problems and identify the need for coaching and counseling sessions Provides a consolidated view at the individual account level and at each level of the firm s defined hierarchy Offers drill up and down capabilities across the hierarchical structure of the firm Allows ad hoc views of the data at any level of the hierarchy Supports extensive sorting and filtering options Presents patterns and trends across the firm as they relate to transaction activity and positions Increased visibility to manage risk Audit Holding Detail Account positions and transaction activity are aggregated and displayed based on the firm s hierarchical structure. The information can be further filtered and sorted on numerous data points, including market value, commission, price, etc. Drilling up and down the hierarchy enables detection of patterns and trends that may otherwise go unnoticed. All information needed to conduct full sales practice review and transaction review is in one place; users don t have to access other systems or reference other documentation. Risk management and firm exposure to high-profile securities and accounts can be supported through the aggregated data views. 8 www.sungard.com/protegent

About SunGard s Protegent SunGard s Protegent is a suite of solutions that help automate financial institutions compliance processes. It helps give financial institutions transparency into their data while helping them to enforce and document their compliance policies and procedures. Protegent s solutions cover social media review, personal trading oversight, market abuse, Reg NMS, Order Audit Trail System (OATS), transaction supervision and surveillance review. For more information, please visit www.sungard.com/protegent About SunGard SunGard is one of the world s leading software and technology services companies. SunGard serves approximately 25,000 customers in more than 70 countries and has approximately 17,000 employees. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of over $4.0 billion, SunGard is one of the largest privately held IT software and services companies. For more information, please visit http://financialsystems.sungard.com. For more information: email: Protegent.marketing@sungard.com visit: www.sungard.com/protegent LONDON Tel: +44 (0)20 8081 3180 HONG KONG Tel: +852 3719 0800 NEW YORK Tel: +1 201 499 5900 SINGAPORE Tel: +65 6308 8000 SYDNEY Tel: +612 8236 9300 2014 SunGard. Trademark Information: SunGard, the SunGard logo and Protegent are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.