The 50% Rule, Indirect Sanctions Exposure & Risk Screening: Keeping up with Regulatory Expectations and Industry Best Practices

US regulators have demonstrated that “check-the-box” screening is no longer sufficient for evaluating Bank Secrecy Act/Anti Money Laundering (BSA/AML) and sanctions compliance programs. The OCC, Federal Reserve, New York Department of Financial Services, and other major regulatory agencies have increased scrutiny on the effectiveness of Know Your Customer (KYC) processes, AML transaction monitoring, and sanctions screening processes.

Since releasing Supervisory Guidance on Model Risk Management in 2011, the OCC and Federal Reserve have provided little guidance to industry on addressing evolving screening expectations and new technologies that are developed to address BSA/AML and sanctions requirements. On top of the OCC/Fed requirements, NYDFS Part 504, effective 2017, has placed additional requirements for financial institutions to assess the “reasonableness, effectiveness, and relevancy” of their BSA/AML and sanctions filtering programs in accordance with their risk profiles. Industry is increasingly relying on independent and objective validations before certifying or submitting action plans to their regulators.

During this interactive session, subject matter professionals from Kharon and KPMG, along with industry leaders, will discuss expectations for the model validation process and Part 504 certification process and suggestions to enhance key controls related to model configuration, data integrity, and program framework in order to improve sanctions detection effectiveness and efficiency.

Counsel Nicole Succar will present during this webinar.