Regulation, Compliance & Disclosure

A yearly publication containing financial statements, management discussion, governance information, and other disclosures.

Example: An investorA person or organisation that commits capital with the expectation of a financial return. reviews five years of annual reports before buying shares.

Annual Report is a yearly publication containing financial statements, management discussion, governance information, and other disclosures; the value of the disclosure lies in what it adds beyond headline numbers: assumptions, risks, segment detail, management explanation and changes since the previous report.

An investor reviews five years of annual reports before buying shares.

Before relying on it, check whether the company later corrected, withdrew or superseded it and whether the market already expected the information; polished presentation does not provide audit assurance.

Laws and controls intended to prevent financial systems from processing criminal proceeds.

Example: The platform verifies identity and monitors unusual transactions.

Anti-Money Laundering describes laws and controls intended to prevent financial systems from processing criminal proceeds; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

The platform verifies identity and monitors unusual transactions.

Do not rely on a provider's summary of Anti-Money Laundering where the financial consequence is material; compare it with the current official source and professional advice where necessary.

A duty to place the client's interests ahead of the provider's when making a recommendation.

Example: The adviser recommends a lower-cost product despite earning less.

Best-Interest Standard is a duty to place the client's interests ahead of the provider's when making a recommendation; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

For example, the adviser recommends a lower-cost product despite earning less.

Verify Best-Interest Standard through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction.

Information barriers intended to prevent confidential information moving between business units.

Example: Advisory staff cannot share takeoverAn acquisition that results in one party gaining control of another company. details with traders.

Chinese Wall describes information barriers intended to prevent confidential information moving between business units; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

Advisory staff cannot share takeover details with traders.

Verify Chinese Wall through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Rules, rates and thresholds can change; Also compare Restricted List, defined here as a list of securities subject to trading or research restrictions because of confidential information or conflicts.

Keeping customer assets separate from a firm's own propertyLand and buildings held for use, rent, development, or capital appreciation..

Example: Client cash is held in designated accounts rather than used for company expenses.

Client-Asset Segregation describes keeping customer assets separate from a firm's own property; distinguish a legal requirement from an industryA more specific group of companies with closely related products or services. practice or a provider's internal policy.

Client cash is held in designated accounts rather than used for company expenses.

For Client-Asset Segregation, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; registration or regulatory status does not guaranteeA contractual promise by another party to meet an obligation if the primary debtor does not. investmentAn asset or commitment of money made with the expectation of future income, growth, or both. performance. Also compare Segregated Account, defined here as an account kept separate for a specific client, purpose, or legal protection.

The person responsible for monitoring adherence to laws, rules, and internal policies.

Example: The compliance officer reviews employee trading.

Compliance Officer is the person responsible for monitoring adherence to laws, rules, and internal policies; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

For example, the compliance officer reviews employee trading.

For Compliance Officer, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; compliance documents are useful only when they are complete and current. Also compare Whistleblower, defined here as a person who reports suspected misconduct or legal violations.

Information given to clients about interests or incentives that could influence advice or decisions.

Example: The adviser discloses compensation received from the product provider.

Conflict Disclosure describes information given to clients about interests or incentives that could influence advice or decisions; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

The adviser discloses compensation received from the product provider.

A practical review of Conflict Disclosure asks who owes the duty, to whom, under which instrument and what remedy or enforcement power exists.

A situation in which personal or institutional interests may interfere with duties to a client or investor.

Example: An adviser earns more commission from one fund than another.

Conflict of Interest is a situation in which personal or institutional interests may interfere with duties to a client or investor; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

An adviser earns more commission from one fund than another.

Verify Conflict of Interest through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Disclosure reduces information gaps but cannot remove misconduct.

An obligation to promptly release material information after listing or registration.

Example: The company announces the loss of a major contract.

Continuous Disclosure is an obligation to promptly release material information after listing or registration; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

The company announces the loss of a major contract.

A practical review of Continuous Disclosure asks who owes the duty, to whom, under which instrument and what remedy or enforcement power exists; disclosure reduces information gaps but cannot remove misconduct.

Controls designed to prevent funds from supporting terrorist activity.

Example: The institution screens customers and transactions against sanctions lists.

Counter-Terrorist Financing describes controls designed to prevent funds from supporting terrorist activity; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

The institution screens customers and transactions against sanctions lists.

For Counter-Terrorist Financing, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; rules, rates and thresholds can change. Also compare Source of Funds, defined here as the origin of money used in a specific transaction or account.

The process of identifying customers, understanding their activity, and assessing risk.

Example: The broker verifies identity and intended investment activity.

Customer Due DiligenceThe investigation performed before investing to verify facts, risks, ownership, finances, and legal claims. is the process of identifying customers, understanding their activity, and assessing risk; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

The broker verifies identity and intended investment activity.

For Customer Due Diligence, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; compliance documents are useful only when they are complete and current.

The provision of material information needed for informed decisions.

Example: The issuer discloses risks, fees, and use of proceeds.

Disclosure is the provision of material information needed for informed decisions; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

The issuer discloses risks, fees, and use of proceeds.

For Disclosure, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance. Also compare Continuous Disclosure, defined here as an obligation to promptly release material information after listing or registration.

A conference call where management discusses results and answers analyst questions.

Example: Investors listen for changes in guidance during the earnings call.

Earnings Call is a conference call where management discusses results and answers analyst questions; distinguish mandatory disclosure from voluntary presentation and audited information from management commentary.

Investors listen for changes in guidance during the earnings call.

For Earnings Call, record the publication date and reporting period, compare prior disclosures, reconcile key figures and identify changes in definitions, guidance or risk language. Also compare Trading Update, defined here as a shorter operational or financial update published between formal reports.

Additional verification and monitoring applied to higher-risk customers or transactions.

Example: The firm obtains more documents for a complex offshore structure.

Enhanced Due Diligence describes additional verification and monitoring applied to higher-risk customers or transactions; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

The firm obtains more documents for a complex offshore structure.

Do not rely on a provider's summary of Enhanced Due Diligence where the financial consequence is material; compare it with the current official source and professional advice where necessary. Disclosure reduces information gaps but cannot remove misconduct.

A legal or ethical duty to act loyally and carefully in another person's best interest.

Example: A trustee must put beneficiaries' interests before its own.

Fiduciary Duty is a legal or ethical duty to act loyally and carefully in another person's best interest; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

For example, a trustee must put beneficiaries' interests before its own.

Verify Fiduciary Duty through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Disclosure reduces information gaps but cannot remove misconduct.

A financial report covering part of a financial year.

Example: The company publishes unaudited six-month results.

Interim Report is a financial report covering part of a financial year; the value of the disclosure lies in what it adds beyond headline numbers: assumptions, risks, segment detail, management explanation and changes since the previous report.

The company publishes unaudited six-month results.

For Interim Report, record the publication date and reporting period, compare prior disclosures, reconcile key figures and identify changes in definitions, guidance or risk language. Also compare Quarterly Report, defined here as a financial report covering a three-month period.

A presentation used by management to explain strategy, performance, and outlook to investors.

Example: The slides contain segment growth and capital-allocation plans.

Investor Presentation is a presentation used by management to explain strategy, performance, and outlook to investors; the value of the disclosure lies in what it adds beyond headline numbers: assumptions, risks, segment detail, management explanation and changes since the previous report.

The slides contain segment growth and capital-allocation plans.

A practical review of Investor Presentation asks what changed, why it changed, what management did not quantify and which claims can be tested in the next report; the disclosure can be accurate yet incomplete.

A fund designed to compensate eligible investors for specified losses caused by an intermediary's failure or misconduct.

Example: Compensation does not cover ordinary market losses.

Investor Protection Fund is a fund designed to compensate eligible investors for specified losses caused by an intermediary's failure or misconduct; distinguish a legal requirement from an industry practice or a provider's internal policy.

Compensation does not cover ordinary market losses.

A practical review of Investor Protection Fund asks who owes the duty, to whom, under which instrument and what remedy or enforcement power exists; disclosure reduces information gaps but cannot remove misconduct.

A market participant authorised by the relevant regulator to perform specified activities.

Example: The investor confirms that the fund managerThe licensed firm responsible for investment decisions and day-to-day management of a fund. is licensed.

Licensed Operator is a market participant authorised by the relevant regulator to perform specified activities; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

For example, the investor confirms that the fund manager is licensed.

For Licensed Operator, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; rules, rates and thresholds can change.

Management's explanation of financial results, trends, risks, liquidityThe ease and speed with which an investment can be converted into cash without a major price concession., and outlook.

Example: The MD&A explains why margins fell despite revenue growth.

Management Discussion and Analysis describes management's explanation of financial results, trends, risks, liquidity, and outlook; the value of the disclosure lies in what it adds beyond headline numbers: assumptions, risks, segment detail, management explanation and changes since the previous report.

The MD&A explains why margins fell despite revenue growth.

For Management Discussion and Analysis, record the publication date and reporting period, compare prior disclosures, reconcile key figures and identify changes in definitions, guidance or risk language; the disclosure can be accurate yet incomplete.

Monitoring trading activity to detect manipulation, insider dealing, and rule breaches.

Example: The exchange investigates unusual trades before a takeover announcement.

Market Surveillance describes monitoring trading activity to detect manipulation, insider dealing, and rule breaches; distinguish a legal requirement from an industry practice or a provider's internal policy.

The exchange investigates unusual trades before a takeover announcement.

For Market Surveillance, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; disclosure reduces information gaps but cannot remove misconduct. Also compare Client-Asset Segregation, defined here as keeping customer assets separate from a firm's own property.

An event important enough to influence investor decisions or securityA tradable financial claim or ownership interest, such as a share, bond, or fund unit. prices.

Example: A major contract loss is disclosed as a material event.

Material Event is an event important enough to influence investor decisions or security prices; distinguish mandatory disclosure from voluntary presentation and audited information from management commentary.

For example, a major contract loss is disclosed as a material event.

Before relying on it, check whether the company later corrected, withdrew or superseded it and whether the market already expected the information. Also compare Profit Warning, defined here as an announcement that expected profit will be materially below previous guidance or market expectations.

The importance of information to a reasonable investor's decision or to financial statements.

Example: A small error may be immaterial while a covenantA contractual promise or restriction designed to protect lenders or govern borrower behaviour. breach is material.

Materiality is the importance of information to a reasonable investor's decision or to financial statements; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

A small error may be immaterial while a covenant breach is material.

Verify Materiality through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Disclosure reduces information gaps but cannot remove misconduct.

Selling a financial product through misleading statements, unsuitable advice, or inadequate disclosure.

Example: A retiree is sold a locked, high-risk product without explanation.

Mis-Selling describes selling a financial product through misleading statements, unsuitable advice, or inadequate disclosure; distinguish a legal requirement from an industry practice or a provider's internal policy.

A retiree is sold a locked, high-risk product without explanation.

A practical review of Mis-Selling asks who owes the duty, to whom, under which instrument and what remedy or enforcement power exists; rules, rates and thresholds can change. Also compare Best-Interest Standard, defined here as a duty to place the client's interests ahead of the provider's when making a recommendation.

An account where a nominee is the registered holder while the investor remains the beneficial ownerThe natural person who ultimately owns, controls, or benefits from an account or investment..

Example: The broker's nominee appears on the register for administrative convenience.

Nominee Account is an account where a nominee is the registered holder while the investor remains the beneficial owner; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

The broker's nominee appears on the register for administrative convenience.

Verify Nominee Account through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction.

An account holding assets for multiple underlying clients under one registered name.

Example: The custodianA licensed institution that safeguards a fund's cash and securities separately from the manager's own assets. keeps detailed sub-records for each investor.

Omnibus Account is an account holding assets for multiple underlying clients under one registered name; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

The custodian keeps detailed sub-records for each investor.

Do not rely on a provider's summary of Omnibus Account where the financial consequence is material; compare it with the current official source and professional advice where necessary. Registration or regulatory status does not guarantee investment performance.

Trading by employees in their own accounts, usually subject to firm rules and pre-clearance.

Example: An analyst obtains approval before buying a covered share.

Personal Account Dealing describes trading by employees in their own accounts, usually subject to firm rules and pre-clearance; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

For example, an analyst obtains approval before buying a covered share.

Verify Personal Account Dealing through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction.

A person entrusted with a prominent public function, or certain connected persons, who may require enhanced checks.

Example: The institution applies enhanced due diligence to a PEP.

Politically Exposed Person is a person entrusted with a prominent public function, or certain connected persons, who may require enhanced checks; distinguish a legal requirement from an industry practice or a provider's internal policy.

The institution applies enhanced due diligence to a PEP.

Verify Politically Exposed Person through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Disclosure reduces information gaps but cannot remove misconduct.

An announcement that expected profit will be materially below previous guidance or market expectations.

Example: The share priceThe market price at which one share is quoted or traded. falls after management issues a profit warning.

Profit Warning is an announcement that expected profit will be materially below previous guidance or market expectations; distinguish mandatory disclosure from voluntary presentation and audited information from management commentary.

The share price falls after management issues a profit warning.

A practical review of Profit Warning asks what changed, why it changed, what management did not quantify and which claims can be tested in the next report. Also compare Trading Update, defined here as a shorter operational or financial update published between formal reports.

Potential legal responsibility for material misstatements or omissions in an offering document.

Example: Investors sue after the prospectusThe formal document explaining a fund's objective, strategy, risks, fees, governance, and dealing rules. conceals a major debt.

Prospectus Liability describes potential legal responsibility for material misstatements or omissions in an offering document; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

Investors sue after the prospectus conceals a major debt.

For Prospectus Liability, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; registration or regulatory status does not guarantee investment performance. Also compare Securities Registration, defined here as the formal approval or filing process required before certain securities may be publicly offered.

A financial report covering a three-month period.

Example: The market compares quarterly revenue with analyst expectations.

Quarterly Report is a financial report covering a three-month period; distinguish mandatory disclosure from voluntary presentation and audited information from management commentary.

The market compares quarterly revenue with analyst expectations.

Before relying on it, check whether the company later corrected, withdrew or superseded it and whether the market already expected the information; polished presentation does not provide audit assurance. Also compare Management Discussion and Analysis, defined here as management's explanation of financial results, trends, risks, liquidity, and outlook.

A document submitted to a regulator or exchange under applicable rules.

Example: The issuer files annual audited financial statements.

Regulatory Filing is a document submitted to a regulator or exchange under applicable rules; distinguish a legal requirement from an industry practice or a provider's internal policy.

The issuer files annual audited financial statements.

Verify Regulatory Filing through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Compliance documents are useful only when they are complete and current; Also compare Compliance Officer, defined here as the person responsible for monitoring adherence to laws, rules, and internal policies.

A list of securities subject to trading or research restrictions because of confidential information or conflicts.

Example: Employees cannot trade a company on the restricted list.

Restricted List is a list of securities subject to trading or research restrictions because of confidential information or conflicts; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

Employees cannot trade a company on the restricted list.

Verify Restricted List through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Disclosure reduces information gaps but cannot remove misconduct.

Checking customers and transactions against applicable sanctions lists.

Example: A transfer is paused for manual sanctions review.

Sanctions Screening describes checking customers and transactions against applicable sanctions lists; the practical effect of the requirement depends on jurisdiction, the regulated entity, the product and the date on which the rule or obligation applies.

A transfer is paused for manual sanctions review.

For Sanctions Screening, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; registration or regulatory status does not guarantee investment performance. Also compare Suspicious Transaction Report, defined here as a confidential report filed with an authority when activity appears suspicious under applicable law.

The formal approval or filing process required before certain securities may be publicly offered.

Example: The issuer completes registration before marketing the fund.

Securities Registration is the formal approval or filing process required before certain securities may be publicly offered; distinguish a legal requirement from an industry practice or a provider's internal policy.

The issuer completes registration before marketing the fund.

Verify Securities Registration through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Registration or regulatory status does not guarantee investment performance.

An account kept separate for a specific client, purpose, or legal protection.

Example: The broker holds customer securities in segregated custody.

Segregated Account is an account kept separate for a specific client, purpose, or legal protection; distinguish a legal requirement from an industry practice or a provider's internal policy.

The broker holds customer securities in segregated custody.

For Segregated Account, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance; compliance documents are useful only when they are complete and current. Also compare Omnibus Account, defined here as an account holding assets for multiple underlying clients under one registered name.

The origin of money used in a specific transaction or account.

Example: The investor provides a salary statement for the subscriptionThe process of buying new units in a fund by submitting money and a valid instruction..

Source of Funds is the origin of money used in a specific transaction or account; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

For example, the investor provides a salary statement for the subscription.

Verify Source of Funds through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Also compare Source of Wealth, defined here as the broader origin of a person's accumulated assets.

The broader origin of a person's accumulated assets.

Example: A business owner explains that wealth came from company dividends and a sale.

Source of Wealth is the broader origin of a person's accumulated assets; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

For example, a business owner explains that wealth came from company dividends and a sale.

Do not rely on a provider's summary of Source of Wealth where the financial consequence is material; compare it with the current official source and professional advice where necessary. Rules, rates and thresholds can change; Also compare Politically Exposed Person, defined here as a person entrusted with a prominent public function, or certain connected persons, who may require enhanced checks.

The requirement or process of determining whether an investment fits a client's circumstances and objectives.

Example: A high-risk illiquid product may be unsuitable for near-term school fees.

Suitability is the requirement or process of determining whether an investment fits a client's circumstances and objectives; distinguish a legal requirement from an industry practice or a provider's internal policy.

A high-risk illiquid product may be unsuitable for near-term school fees.

Verify Suitability through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction.

A confidential report filed with an authority when activity appears suspicious under applicable law.

Example: The compliance team files a report after unexplained transaction patterns.

Suspicious Transaction Report is a confidential report filed with an authority when activity appears suspicious under applicable law; the requirement establishes a legal, supervisory or control requirement governing how financial activity is conducted, recorded or disclosed.

The compliance team files a report after unexplained transaction patterns.

For Suspicious Transaction Report, identify the jurisdiction, current rule, responsible authority, affected party, required records, deadline and consequence of non-compliance. Also compare Market Surveillance, defined here as monitoring trading activity to detect manipulation, insider dealing, and rule breaches.

A shorter operational or financial update published between formal reports.

Example: The retailer reports same-store sales for the holiday period.

Trading Update is a shorter operational or financial update published between formal reports; the value of the disclosure lies in what it adds beyond headline numbers: assumptions, risks, segment detail, management explanation and changes since the previous report.

The retailer reports same-store sales for the holiday period.

For Trading Update, record the publication date and reporting period, compare prior disclosures, reconcile key figures and identify changes in definitions, guidance or risk language; selective metrics can improve the narrative without improving the business.

A confidential list used to monitor securities where the firm may possess sensitive information.

Example: Compliance reviews trading in watch-list companies.

Watch List is a confidential list used to monitor securities where the firm may possess sensitive information; the requirement allocates responsibility among investors, firms, regulators or tax authorities and creates records that can be examined or enforced.

Compliance reviews trading in watch-list companies.

Verify Watch List through legislation, regulator rules or official guidance dated for the relevant period; keep evidence of every filing, consent, disclosure or deduction. Rules, rates and thresholds can change.

A person who reports suspected misconduct or legal violations.

Example: An employee reports falsified revenue through a protected channel.

Whistleblower is a person who reports suspected misconduct or legal violations; distinguish a legal requirement from an industry practice or a provider's internal policy.

An employee reports falsified revenue through a protected channel.

Do not rely on a provider's summary of Whistleblower where the financial consequence is material; compare it with the current official source and professional advice where necessary. Disclosure reduces information gaps but cannot remove misconduct; Also compare Chinese Wall, defined here as information barriers intended to prevent confidential information moving between business units.