Introduction
Navigating the deal clearance process can provide many benefits. A deal clearance workflow not only accelerates transaction times but also ensures compliance with regulatory requirements, such as the EU and UK Market Abuse Regulation (MAR). Below is a brief guide that outlines best practices, tools, and strategies for optimizing deal clearance workflows within financial and corporate environments.
What is Deal Clearance?
Deal clearance is the process by which proposed transactions, particularly those involving securities, are reviewed, and approved by compliance and legal departments within an organisation to ensure they do not violate insider trading laws or other regulatory statutes. Here are some key components of an Efficient Deal Clearance Workflow:
- Pre-Clearance Protocols
- Automated Clearance Systems
- Post-Clearance Review
- Continuous Improvement
Pre-Clearance Protocols
The foundation of an efficient deal clearance process is a robust pre-clearance protocol. This includes the formulation of clear guidelines that dictate the conditions under which deals can be proposed and reviewed.
Steps to Establish Effective Pre-Clearance Protocols:
- Define Eligible Transactions: Clearly specify what types of deals require clearance and under what circumstances.
- Identify Key Stakeholders: Determine who within the organisation needs to be involved in the deal clearance process. This usually includes legal advisors, compliance officers, and senior management.
- Set Compliance Benchmarks: Establish specific legal and compliance requirements that all transactions must meet before proceeding.
- Implement Conflict Checks: Develop a system to identify and resolve potential conflicts of interest early in the clearance process.
Automated Clearance System
Leveraging technology can significantly streamline the deal clearance process. Automated systems reduce manual entry errors, accelerate transaction processing, and maintain a transparent audit trail.
Features of Effective Automated Clearance Systems:
- Integration Capabilities: Should seamlessly integrate with existing trading and compliance platforms.
- Real-Time Processing: Capable of processing clearance requests in real-time to speed up decision-making.
- Compliance Tracking: Automatically checks all deals against compliance rules and logs all actions for auditing purposes.
- Alerts and Notifications: Sends instant alerts about issues or conflicts, allowing for quick resolution.
Post Clearance Review
- After a deal has been cleared, conducting a post-clearance review is crucial to ensure that all aspects of the transaction were managed correctly and in compliance with relevant laws.
Components of a Post-Clearance Review:
- Audit Trail Review: Examine the audit trails created by the clearance system to verify that all actions were appropriately logged.
- Compliance Verification: Double-check that the transaction met all compliance requirements and did not breach any regulations.
- Stakeholder Feedback: Gather feedback from all involved parties to identify any issues or bottlenecks in the process.
Continuous Improvement
- The final component of optimizing deal clearance workflows is the commitment to continuous improvement. This involves regularly updating protocols and systems based on new regulations, technological advancements, and feedback from stakeholders.
Strategies for Continuous Improvement:
- Regular Training: Keep all relevant personnel updated on the latest regulatory developments and best practices in deal clearance.
- Technology Upgrades: Continually assess and upgrade technological tools to leverage new features and capabilities that can improve efficiency.
- Process Re-evaluation: Periodically review the entire deal clearance process to identify inefficiencies and implement improvements.
Conclusion
Creating an efficient deal clearance workflow helps maintain compliance standards. This will also assist you in facilitating quick transaction approvals. By establishing clear pre-clearance protocols, utilizing automated systems, conducting thorough post-clearance reviews, and committing to continuous improvement, organizations can ensure that their deal clearance processes are both effective and compliant with all regulatory requirements. The use of technology, particularly automated compliance, and clearance platforms, plays a critical role in achieving these goals, making complex processes manageable and more reliable.
InsiderList's Deal Clearance Platform
You can handle all of your employee clearance requests with ease through InsiderList's easy to use platform. The platform allows users to easily create and submit trade requests through their individual user portals. Meanwhile, the company can set up and manage restricted lists, and automatically review and approve requests. Find out more about the deal clearance features here.
