BASCOM'S FOLLY SOLUTIONS SERVICES

Regulated entities in Vilnius, Lithuania and other entities in European jurisdiction are required to comply with increasing and complex regulation that directly impacts the way that they conduct their business, organise their internal governance and their operations and set up their relations with clients, delegates and other stakeholders.

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In order to help our clients to evaluate the impact of these rules on their activities, we have set up a range of consulting and educational services regarding all aspects of regulatory compliance.

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Regulated entities which want to manage their compliance in a professional manner may contact us for:

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• Compliance consulting to assess the entity's compliance perimeter on site

• Assistance in the definition of compliance programs 

• Assistance with any special project to be handled by the compliance function

ANTI-MONEY LAUNDERING CONSULTING AND SUPPORT SERVICES

THE REVIEW AND DESIGN OF YOUR AML PROGRAM IN A PRACTICAL AND COMPLIANT WAY

Anti-Money laundering (“AML”) has been at the heart of the regulatory concerns of regulated entities for many years.

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In Vilnius, Lithuania and other European jurisdictions, an evolving regulatory environment has obliged such regulated entities to review their AML framework.

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We offer AML services which cover the following:

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• A full independent review of the regulated entities’ AML program

• Certified trainings and awareness sessions for employees and management

• Ad-hoc support in case of remediation plans

• Assistance in the definition of regulated entities' risk-based approach

• Drafting tailored AML policies and Know Your Client checklists

GENERAL DATA PROTECTION REGULATION SUPPORT SERVICES

SUPPORT IN ASSESSING YOUR CURRENT LEVEL OF COMPLIANCE WITH THE DATA PROTECTION REGULATION AND IN FILLING THE IDENTIFIED GAPS WITH GDPR PROVISIONS

The protection of personal data has become a growing concern for companies. Regulation (EU) 2016/679 (“General Data Protection Regulation” or “GDPR”), which came into force on 25 May 2018, is now providing greater clarity on the rights of data subjects, data controllers and data processors as well as cross-border implementation.

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This is where we believe that our personal data protection experts can provide added value for your business. We can assist you with the following:

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• Staff training: do you have the knowledge required to raise awareness within your business? We provide GDPR awareness training to your staff involved in processing operations as well as to personnel with permanent or regular access to personal data.
  
  

• Electronic register: we conduct an inventory of your organisation’s service providers and personal data processing on the basis of the information gathered during working sessions, potentially with the support of dedicated software to organise your action plan.
  Compliance “Score Card”: we provide you with:​​depending on your status, an analysis in the light of the GDPR requirements of the identified data processes and data processors selected, which will highlight potential gaps.

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• a scoping exercise to assess your compliance status and to identify potential issues;

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• Risk mitigation measures: we provide you with a list of recommendations and actions to be taken to achieve compliance with the new GDPR project together with the management of relevant stakeholders involved in the technical remediation.
  
  

• Documentation review: in collaboration with our advisors at Bascom's Folly Solutions we assist you with the drafting of personal data procedures, personal data impact assessments (“DPIA”), updates to service agreements and data processing agreements.
  
  

• Mandate of Data Protection officer (“DPO”): do you wish to appoint a DPO to coordinate the proper implementation of the GDPR, but you would prefer not to recruit? We can take on such DPO mandate, and provide you with the benefit of our full independence, technical knowledge and a close relationship with the  control authorities.

If you are a management company, investment fund, bank or insurance company, our Regulatory Consulting expertise can help you to assess your current level of compliance with the data protection regulation and support you in filling the identified gaps with GDPR provisions.

RISK MANAGEMENT

SUPPORT RISK MANAGEMENT FUNCTIONS OF MANAGEMENT COMPANIES AND OTHER FINANCIAL MARKETS PARTICIPANTS

We assist fund managers (AIFMs and UCITS management companies) and self-managed investment funds in the implementation of their risk management framework with a view to meeting the increasing standards of European regulators. We help our clients with defining, assessing, monitoring, and reporting the risks inherent in the funds they manage and assist them in compliance matters related to their regulated risk management activities across Europe. 

Delivered by a strong team of risk consultants, who are assisted when required by regulatory advisors and lawyers, our core services include:

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• helping clients to prepare PRIIPs not only from legal perspective, but also from metrics perspective.

The recent PRIIPs regulation and the obligation to produce and deliver a KID each time a packaged product is sold or advised to an investor who is not a “professional” has created a new and unwelcome difficulty for product producers, notably as regards computing the metrics required by the new rules.

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The combination of (i) a lack of methodology and the inadequacy of the prescribed approaches regarding the respective performance and cost estimates for “Category 1” PRIIPs and (ii) the absence of clear rules for selecting benchmark data as a way to circumvent the setting of default market risk classifications has triggered considerable disparities in the PRIIPs-KID metrics as produced by market participants.

Similarly, the voluntary omission of the credit risk measure by certain service providers producing KIDs, or their consideration of default values in order to allow a full automation of the process, has led to several biases regarding the assessment of Synthetic Risk Indicators (SRIs) for “Category 2” PRIIPs. Not to mention data challenges imposed by the transaction cost methodologies for such products. 

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Bascom's Folly Solutions could help its clients understand and monitor effectively all the risk, performance and cost metrics underlying the PRIIPs regulation, whether these are produced by a service provider or in-house.

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• Risk Management Process (“RMP”) and procedures

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The granting of a license by the supervisor authority to any new or existing AIFM or UCITS management company wishing to establish or to extend its activities/strategies in Vilnius, Lithuania is conditional upon the implementation of a sound risk management framework in which the RMP and its related risk procedures play a central role. We help clients to draft the documentation required and submit it to supervisor authority or, alternatively, to critically review documents belonging to the client or amend specific sections on request.

This will be of particular relevance for those clients managing strategies which are more exotic or innovative, but also for those who wish to have an independent and fresh view on their process. 

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• Risk Management training

We provide our clients (up to senior management level) with certified training sessions on key risk management topics. These training sessions can be attended by all interested clients or take the form of more tailored sessions, centered around specific strategies.

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• Risk Reporting

Both the UCITS and AIFM regulations, as further detailed by the relevant supervisor circulars, requires the Permanent Risk Management Function (PRMF) to report regularly to senior management on the level of risk incurred by each managed fund. To reach this objective, we assists our clients by implementing automated risk management reporting targeting PRMF for UCITS and AIFs.

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• Validation of risk models 

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​European regulations require that for UCITS adopting a Value at Risk approach the VaR model used must undergo a periodic validation by an independent third party which has not been involved in the building process of the model in order to ensure the robustness of the model.

To assist its clients, our expertise has developed a “VaR Backtesting” approach which is used to assess both the conceptual and empirical soundness of the VaR models adopted by a UCITS to evaluate its global exposure.

Furthermore, we provide our clients with independent reviews of liquidity risk, operational risk models and stress testing.

UCITS NOTIFICATION AND AIF PLACEMENT: NATIONAL "PRIVATE PLACEMENT" REGIMES

MANAGE ALL NOTIFICATION OR REGISTRATIONS OF UCITS MARKETED IN EU OR OUTSIDE EU

Even if the UCITS notification is a well-known process, its successful outcome requires strict compliance with numerous technical and administrative requirements, as illustrated by the Central European regulator annual report of 2015: indeed, during that year, 39% of initial notification files were rejected by the regulators. This triggers additional delays and costs.

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We could cover all notifications matters or registrations of UCITS marketed in EU or outside EU, and the maintenance thereof:

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• Notification and maintenance of UCITS using their passport in EEA countries

• Registration and maintenance of UCITS in non-EEA countries

The AIFMD marketing rules create a variety of situations and corresponding marketing possibilities and constraints, which sometimes require to be looked at through the lenses of each distribution country.

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Indeed, there are cases where the EU marketing passport does not work:

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• When there is a third country set-up (with non EU AIFM and/or non EU AIF)

• When selling to non-professional investors

• When the AIFM is sub-thresholds

In such cases, depending on the country targeted, actions to be taken to be able to market in a compliant manner vary, from a simple notification to a full authorisation process.

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We assists AIFMs in connection with any applicable process towards authorities, as prescribed by local regulations.