How LGT detects market abuse and insider trading
LGT Group creates transparency at an early stage by monitoring client transactions and proprietary trading and checking them for possible abusive character.
ABOUT LGT
LGT Group, based in Vaduz, Liechtenstein, is the world’s largest family owned private banking and asset management group and has an international presence in over 20 locations. Its three business divisions focus on private banking, asset management and impact investing.
Challenge
Prevent market abuse in securities transactions
LGT was looking for software that fulfills the minimum requirements for preventing market abuse as laid down in Liechtenstein’s Market Abuse Act as well as further bank-specific requirements.
Goals
- Compliance with legal requirements against market abuse in trading with financial instruments
- Automatic detection of abusive practices
- Reduction of reputation risks by monitoring employee transactions and proprietary trading
- Reduction of reputation risks by monitoring personal
account dealing and proprietary trading - Creation of transparency regarding the complexity of the securities master data
- Audit-proof documentation and historization
Solution
MAID to monitor abusive practices
The MAID (Market Abuse Insider Dealing Detection) software solution is based on ACTICO Platform and was seamlessly integrated into LGT’s existing systems and business processes. In order to recognise a pattern in transactions and reduce irrelevant hits, the softwares checking procedure was adapted to individual business structures.
- Minimization of the effort in daily operation
- Electronic documentation of each individual clarification step
- Simple and fast recording of monitoring and scenarios
- Flexible mapping of regulations and internal guidelines
Impact
Efficient monitoring with MAID
With the software solution the bank creates scenarios and lists in order to automatically monitor transactions and proprietary trading. These can be expanded and enable a reduction in the workload.
„Aside from compliance with the legal requirements in relation to market abuse, we were interested in using software that would enable us to be proactive. What could be worse for a bank than to lose its good name due to malpractice.”
Stefanie Giger, Compliance Officer, LGT Bank in Liechtenstein
MAID to detect abusive practices
The automatic and rapid monitoring helps to identify anomalies quickly, which minimizes risks.
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