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Conflict Control Room

The need for conflicts management have never been so desired. As a reaction to the conflicts of interest that affected major Wall Street investment banks in connection with investment research and the issue of securities, which received enormous publicity in the early 2000, financial services authorities and regulators globally examined business practices that raise potential conflicts of interest. The scrutiny focused on several aspects of the financial industry, including research, merchant banks, investment banking, asset management, insurance brokerage and securities brokerage. These scrutiny revealed numerous cases and instances where the interests of ordinary clients were substituted with the interests of firms or high net worth clients. Based on the outcome of these investigations, U.S. authorities and many other jurisdictions imposed rules to ensure unbiased investment research and recommendations.

Thus, Investment banking firms, merchant banks, insurance firms, trust firms, broker-dealer firms or asset management firms with diversified products and service offerings are required to design and implement effective “Deal Clearing” and wall crossing procedures. The deal clearing and wall crossing processes and procedures require that a “Control Room” be established for the purpose of managing conflicts related procedures, including research analyst wall-crossing, deal clearing, market abuse monitoring, watch and restricted list management, firm-wide Chinese walls management, confidential information management, etc. LeishTon can work with you to establish an effective Conflicts Control Room. We can also review your Control Room function as a distinct service or as an integral part of your compliance and Compliance function’s review. Key activities in the Control Room include:

   Conflicts/Deal clearing

   Market abuse monitoring

   Watch and Restricted list management

   Wall crossing procedures management

   Personal Account Dealing approval

   Outside business interest/conflicts of interest approval

   Wall crossing of public-side employees