Euronext is introducing a new service that helps customers to comply with internal and external regulations regarding employee trading. This new, pan-European online solution has been developed by Euronext VPS, the Norwegian Central Securities Depository.
“TradeLog is a new online solution that helps compliance departments monitor employee trading,” explains Nicola Miori, Product Owner at VP Securities. “It can be tailored to the company’s environment and incorporates all of the regulations, internal policies and procedures which govern employees’ trading activity.”
TradeLog includes a fully digital registration process for pre-approval of trades, and automated monitoring and notification of trade violations. The solution is linked to the employee’s account in VP Securities, and it also links directly to the Danish Business Authority (Erhvervsstyrelsen) to retrieve information about listed companies.
vp.INSIDER vs TradeLog
For VP Securities customers familiar with vp.INSIDER, it’s important to note the key differences between the two services. vp.INSIDER only covers shares issued by the customer in question, whereas TradeLog covers the entire market. Due to vp.INSIDER’s unique structure and focus on compliance with the Market Abuse Regulation, the two services will remain separate for the time being. For vp.INSIDER customers, TradeLog provides an extension to the current trade monitoring services you have at your disposal, enabling you to monitor the full range of your employees’ trading activities.
Using technology to simplify compliance
For VP Securities customers, TradeLog is a significant improvement when compared to the current trade monitoring solution. “Instead of having to manually check trades, our customers will now automatically receive notifications if their employees have violated regulations,” explains Søren Milbregt, Senior Relationship Manager. “With TradeLog, we’ve automated the entire process and centralised it on one platform, from the employee’s initial application to the compliance department’s evaluation and approval, and the ongoing trade monitoring and notifications.”
This automation gives compliance departments several advantages. “It will be a lot easier for compliance departments to see who’s complying with their trading guidelines and regulations,” Søren Milbregt says. “The system moves a lot of the responsibility onto the individual employee, which will also save time on the compliance side.”
TradeLog automatically ensures that consent from the associated employees is obtained and maintained.
Taking a proactive approach to compliance
While TradeLog clearly will make it easier for larger companies to monitor their employees’ trading activity, Søren Milbregt points out that the system offers benefits for companies of all sizes. “Even if you are a small investment company, this solution enables you to take a more structured, transparent approach to enforcing employee trading regulations. There’s considerable focus on insider trading and employee investment practices at the moment. TradeLog is a way for investment companies to take a proactive approach to compliance and put monitoring tools in place before incidents arise.”
There is a future-proofing aspect to the service as well. “We know that more compliance regulations are coming. Financial institutions that already have automated compliance measures in place will have a decided advantage in terms of being able to quickly adapt to new requirements,” Nicola Miori states. “The TradeLog solution is flexible and can be customised to an individual organisation’s internal trading policies, as well as changes to regulatory requirements. With this system in place, financial institutions are in a good position to comply with current and future requirements.”
Senior Relationship Manager
Product Owner, Data Services