8of9 became a RegTech firm in April 2016.  Since then, we’ve developed and continue to deliver innovative tech solutions that automate compliance with complex and shifting regulations. Our solutions allow clients to shift their existing business model into one that is predictive of regulatory needs, reducing the cost of compliance.

Check out our solutions for  the Net Stable Funding Ratio Rule and QFC Recordkeeping Rule! In this post we highlight the foundational tool in our RegTech solutions.

 

Business Logic

8of9 is the regulatory partner for Sapiens, a leading global technology company in the financial services industry. Our RegTech solutions use Sapiens DECISION™, a business decision management tool, to create a logic flow model for compliance with the latest financial regulations. .

8of9’s RegTech Experts:

  • Analyze lengthy regulations
  • Use their banking, technology, and legal expertise to extract critical information at their most granular
  • Ensure that each regulatory requirement is captured and represented within our model to produce outputs that meet our client needs

Our solutions are firmly based on the subject matter expertise and financial services experience of 8of9.

Qualified Index Test of 871(m) Solution

IRS Rule 871(m) is set to take effect on January 1, 2018, making life difficult for broker-dealers with  non-delta one contracts.

The Rule:  Imposes a withholding tax on derivatives that economically mirror a direct investment in a US equity, which itself would require a withholding tax.  This seeks to addressan increase in use of foreign derivatives which fall outside traditional withholding requirements, leading to diminished revenues for the IRS.  One of the exceptions carved out in the 2018 version of871(m) is for qualified indexes.  The rule contains a description of a qualified index, and allows those affected by the rule to determine whether their derivatives are based on such an index.

For broker-dealer clients, attempting to respond to 871(m) would be difficult, as there is no set list of qualified indexes.  Adding to the complexity, the language of the rule allows a formerly qualified index to become unqualified if certain metrics shift.  This can leave a broker-dealer exposed to running afoul of the IRS.

With 8of9’s 871(m) Qualified Index Solution, broker-dealers  access a model mapping out all aspects of the qualified index test and plug their own data streams directly into the tool.

 

Department of Labor Fiduciary Rule Solution

One of 8of9’s most requested RegTech solutions is for the anticipated Department of Labor’s (DoL) Fiduciary Rule.

The Rule: While this regulation’s future is currently uncertain (read more about 8of9’s views of the regulatory landscape under Trump), investment advisers who are under its purview must prepare for it.

The DoL Fiduciary Rule Solution outlines every investment relationship which triggers the Fiduciary Rule and creates independent fact types for each relationship.  8of9 maps the relevant data pointsso that advisers have a clear view of their current responsibility under the Fiduciary Rule.

8of9 is an agile, adaptable RegTech firm made up of experts who can create the customized tools to address your regulatory needs. The 871(m) and Fiduciary Rule solutions are two tools that were highly requested by clients and are currently in development.  If your financial institution, brokerage, or team of advisers has a regulatory need, contact us and your request may become our team’s next project.