A Model Toward Formalizing and Monitoring Compliance of Investment Funds Activities

Investment funds operate in a highly regulated sector and are thus required to act within strict constraints. Currently, compliance of fund activities is only checked through periodic inspections of the reports issued by the funds. This checking process is mostly performed manually and does not fully capture the data produced by the fund. Therefore, there is a need for providing automated solutions to support compliance monitoring of fund activities. We propose fulfilling this need using a model-driven approach. As a starting point, we create a conceptual model that formalizes the information types pertinent to compliance of fund activities. Building such a conceptual model requires analyzing multiple sources of compliance requirements, including both the applicable regulations and fund documents containing self-imposed requirements by the fund on itself. It also requires analyzing business data to understand the practice. This activity comes with various challenges mainly due to the discrepancies between the legal and business terminology. In this paper, we present our conceptual model and we further discuss the challenges we encountered during its creation. This model serves as an enabler for developing an automated support for monitoring fund activities.