Broker-Dealer AML Transaction Monitoring: The Technological Imperative

Broker-dealers often face a significant challenge monitoring transactions for possible money laundering or other suspicious activity, especially given the volume of transactions they handle. Clearing firms, which often handle a substantially higher trading volume, have an even bigger challenge. Clearing firms are also expected to provide monitoring resources such as reports of wire activity, journals of funds and securities, and other transaction activity, to their introducing brokers so they can comply with their own reporting responsibilities.¹While introducing and clearing brokers each have an independent responsibility to identify and report suspicious transactions, they may allocate monitoring responsibilities between them. ...