Regulatory Advisory Firm of the Year: SunGard Global Services

Under this approach, rather than implementing and building a complex system, the client pays only for the results of the trade analysis carried out by senior-level SunGard Global Services executives. This lowers the cost of entry significantly.

“The service-based model is easier and quicker to implement than a software package and significantly cheaper,” says Sid Jacobson, partner at Houston-based SunGard Global Services. “It’s not software but it is a basic model with algos already in place.”

The firm describes its model as both an analytical and advisory offering. “We’re trying to be a partner working with the client to mitigate their regulatory risks,” says managing partner Austin Morris. “It involves sitting down with the client and scoping out what analysis would be useful for them.”

The analysis addresses both external regulatory requirements and internal controls. “Our service allows an organisation to immediately improve posture with regulators through greater transparency while at the same time mitigating risk associated with undesirable trade practices,” says Morris. 

As well as allowing customers to get on the correct regulatory track, the monitoring and surveillance service provides insights into trading behaviour that a company may not have noticed before. A unique addition to the service in 2011 was a ‘trending and look-back review’, which is supplied quarterly.

“Looking back on activity from a trending standpoint, we can show what behaviours occurred during certain events – for example, the Japanese earthquake or the Arab Spring,” says John Doran, principal.

During those particular events, the biggest impact from a commodities point of view was the run-up in crude oil prices. “Knowing that, the attempt was then to find out whether trading behaviour exacerbated the situation or whether there was a flight to safety,” Doran explains. So behaviours would be analysed prior to events and then during them in order to find out where the money went. “Did it stay in the same trades as before or was it moved to somewhere less risky?”

SunGard Global Services provides this analysis in the form of detailed reports that show specific characteristics of trade behaviour for respective events. The analysis first takes place at the macro level of the company, but it can then drill down into what happened at a delivery point or on a specific trading desk, or even down to individual trader behaviour.

“We offer multiple angles that we believe would be interesting and we try to anticipate the client’s needs. However, if they have new demands which aren’t already in the mix, we can add these in very quickly,” says Phil Henderson, manager. Most requests can be added within 24 hours, with emergency requests taking even less time, Henderson adds. 

This type of analysis, which allows a company to better understand where potential trouble spots exist, is essential for effective trade monitoring and surveillance. “Knowing high-risk traders, assets and time frames that may coincide with external events provides a wide range of coverage for the compliance team,” says Jacobson.

The concept for SunGard’s surveillance as a service model came out of the firm’s previous experience working with a US Department of Justice-appointed monitor team assigned to a large oil company.

“Following this large project we knew there was a need out there at many companies for something similar, so we wanted to see if it could be offered as a service to a large number of companies,” says Morris.

The service, which has been evolving since 2003, was formally launched in 2009, with mostly global commodities firms as current customers. 

One client in particular is saving over $800,000 annually by utilising SunGard’s service-model approach by avoiding a multi-million dollar package solution cost, along with the infrastructure and staff resources necessary to support it.