"ACTICO provided us with software that enabled us to be proactive and not just reactive."

Stefanie Giger, Compliance Officer

LGT Bank AG uses MAID to detect market abuse & insider dealing

Challenge: Market Abuse Act

LGT Bank was looking for a software solution that fulfills the minimum requirements for preventing market abuse as laid down in Liechtenstein’s Market Abuse Act as well as further banking specific requirements. In addition, the software was to be used for monitoring private employee transactions and ensuring compliance with internal standards and guidelines, for example in relation to 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, furthermore, supports electronic, audit-proof documentation of each clarification step while being flexibly adaptable to changing regulations and internal guidelines.

ACTICO's Market Abuse and Insider Dealing Detection

LGT opted for ACTICO's Market Abuse and Insider Dealing Detection (MAID) compliance module. This solution, which is based on the tried-and-tested ACTICO Rules technology, is capable of automatically identifying the complexity of security master data and critical transactions. Defined scenarios 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 instances of "malpractice" like Front Running and thus, helps protect the company's reputation. The benefits of implementing MAID at LGT Bank were obvious:

Reduced manual processing to a minimum

Short time to market thanks to flexible adaptability to business or legal changes

Revision safety and full traceability

Seamless integration with existing systems and business processes

LGT Bank relies on ACTICO Solutions

Besides MAID, various modules of our Compliance Suite are in use at LGT Bank. LGT-Class, a front-end application for relationship managers and compliance, was developed by ACTICO and is now implemented worldwide at LGT. The Money Laundering Detection System (MLDS) as well as Name Matching Customer have been in use for several years now to prevent money-laundering and terrorism financing. Using Name Matching Transaction software, the bank checks all transactions, regardless of amount, for information connected to data on sanction lists, such as booking texts, initiator or recipient.

Payment Monitoring at LGT Bank AG

Fredy Zuberbühler, Head of Group Compliance at LGT Bank AG, outlined three overriding reasons to monitor incoming and outgoing payments:

Compliance with statutory requirements (economic embargoes of the government of Liechtenstein),

Combating terrorism financing,

and minimizing money laundering, and through all this protecting the bank's reputation.

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

Read our Success Story and learn more about ACTICO's compliance software in use at LGT Bank.