LGT Bank was looking for a software that fulfills the minimum requirements for preventing market abuse as laid down in Liechtenstein’s Market Abuse Act. In addition, the software was to be used for monitoring private employee transactions and ensuring compliance with internal standards ( lock-up periods, maximum number of trades allowed per month, etc.)
LGT wanted to move beyond implementing the minimum requirements of the Market Abuse Act on the basis of individual reports and lists from the rating systems in use. LGT was looking to switch over to electronic monitoring by implementing a software that supports audit-proof documentation of each clarification step while being flexibly adaptable to changing regulations and internal guidelines.
LGT opted for ACTICO's Market Abuse and Insider Dealing Detection (MAID) software. This solution is based on ACTICO Rules technology. It is capable of automatically identify the complexity of security master data and critical transactions. Rules define, whether a transaction needs to be clarified. Activities designed to simulate market volume in order to influence stock quotes or so called wash trades are typical scenarios for MAID. The software also detects "malpractice" like Front Running.
Besides MAID, various ACTICO software systems are in use. LGT-Class, a frontend application for relationship managers and compliance is implemented in various countries. The Money Laundering Detection System (MLDS) as well as Name Matching Customer have been in use for several years to prevent money-laundering and terrorism financing. Using Name Matching Transaction software, LGT checks all transactionsfor information connected to data on sanction lists, such as booking texts, initiator or recipient.
Fredy Zuberbühler, Head of Group Compliance at LGT Bank AG, outlined three overriding reasons to monitor incoming and outgoing payments:
This also means that undesired funds are rejected, such as those from countries without functioning legal systems.
"Aside from compliance with the legal requirements in relation to market abuse, we were particularly interested in using software that would enable us to be proactive as opposed to just reacting to events. After all, what could be worse for a bank than to lose its good name due to malpractice."
Stefanie Giger, Compliance Officer, LGT Bank AG