Moody’s new offering provides reliable insights into sanctioned entities at the security level to help asset managers identify sanction risk exposure, enhance due diligence processes, and remain compliant efficiently
Moody’s has launched a sanctioned securities screening capability to identify and monitor sanctioned securities within investment portfolios. The intuitive tool enables asset managers to continually and efficiently monitor portfolios for sanctions risk, help avoid regulatory breaches and penalties, and make portfolio decisions with confidence.
The solution leverages one of the world’s largest and most comprehensive entity datasets—complemented with ownership, adverse media, control information, and cautionary sanction risk insights—to address all four types of sanctions risk providing trusted intelligence on sanction exposure available at the national, international and sectoral levels to help investors avoid pre-trade regulatory breaches related to sanctions. With perpetual portfolio monitoring, users are alerted if any securities within their portfolio(s) become subject to new sanctions, or are included on watchlists, helping them to better safeguard their investments.
Not all sanctioned entities are explicitly named on sanctions lists, making the identification of sanctioned securities complex and opaque. Identifying all sanctioned securities within a portfolio requires enhanced due diligence such as analyzing ownership, control, voting power, and linkages to stay compliant and avoid regulatory breaches. Moody’s solution streamlines the sanctions screening process by providing insights that help users remain compliant with laws such as the Office of Foreign Assets Control’s (OFAC) 50 Percent Rule and the European Union’s “by control” rules among other regulations.
Matthew Seymour, General Manager, Buy-Side Solutions at Moody’s, says: “The geopolitical environment is currently unstable and dynamic, which increases market and portfolio risk. To help asset managers, we’ve integrated best-in-class sanctions detection into the investment decision-making process. Managers can verify their investment choices in real-time and be assured that their portfolios are being continuously screened.”
Keith Berry, Moody’s General Manager for Compliance and Third-party Risk, adds: "Moody’s is uniquely positioned to help the buy-side manage and mitigate a variety of integrated risks. When it comes to sanctions risk, we go ‘beyond the lists’ to reveal sanctions risk hidden within complex ownership structures or distributed across multiple sanctioned entities. We connect the dots for clients so that they can focus on growing their business with confidence.”
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