Commentary

Traders Magazine Online News

Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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August 31, 2003

Costs Mount for Tracking Terror

By Gregory Bresiger

Financial institutions would be required to maintain a photocopy of the documents establishing the identity of foreigners who open accounts with U.S. firms under a proposed regulation of the Patriot Act. And that, says the Securities Industry Association, in a comment letter to the U.S. Treasury Department, would be an onerous rule.

"Requiring the copying of identification documents would be an ineffective use of resources and would increase burdens and costs without adding meaningfully to the safeguards financial institutions are implementing," wrote Alan Sorcher, associate general counsel of the SIA. "Making and retaining copies also presents several insurmontable operational issues for financial institutions."

Treasury is considering the final issue of regulations under the Patriot Act.

Meanwhile, it will cost securities firms, banks and insurers from $100,000 to $10 million each to comply with the Act's anti-money laundering regulations (AML), according to a study by Celent Communications, an industry research firm.

Celent also predicted that within three years $11 billion will be spent to comply with the Act's AML regulations.

"AML compliance spending could represent $10 billion more than Elliot Spitzer has been able to shake out of the securities industry for research indiscretions," according to Chris Poelmo, chief executive of Comprehensive Software Systems, a financial services software firm. "Nevertheless, there is still no excuse for not complying with the minimum requirements of the Act, many of which are not exceptionally expensive," added Poelmo, in a commentary on the Traders Magazine Website, tradersmagazine.com.