# US 2014/0207643 A1 · Method and system for automated transaction compliance processing

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- Number: US 2014/0207643 A1
- Document ID: US20140207643A1
- Status: Published application
- Kind: A1
- Application number: 14/087,085
- Filed: 2013-11-22
- Published: 2014-07-24
- Earliest claimed: 2000-06-08
- Assignees: Goldman, Sachs & Co.
- Applicants: Goldman, Sachs & Co.
- Inventors: Hans-Linhard Reich; Gary Hom; Tanuja Prasad
- Web page: https://patentgrep.com/patent/US20140207643A1

## CPC

- G06Q 40/04: Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
- G06Q 30/02: Marketing; Price estimation or determination; Fundraising
- G06Q 30/0601: Electronic shopping [e-shopping]
- G06Q 40/00: Finance; Insurance; Tax strategies; Processing of corporate or income taxes
- G06Q 40/03: Credit; Loans; Processing thereof
- G06Q: INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR

## Abstract

A system for automated transaction compliance processing comprises a list server providing access to one or more lists of securities with trading restrictions and a rules engine which processes compliance requests to determine if, based upon the relationship between the requesting party and the company on behalf the compliance is being performed, the transaction is permissible. Compliance determinations are made using a set of predefined compliance rules. When a request is evaluated, a compliance rule set indicating which rules are to be evaluated at that time is generated in accordance with a party profile indicating the relationship between the party and the company. A message indicating whether the transaction complies with trading restrictions is then returned.

## Claims

### Claim 1

A computer implemented method for performing compliance checking on a request associated with a party to determine if, in view of a relationship between the party and an entity, the request complies with specified restrictions, the method comprising the steps of:
(a) receiving a compliance request having an associated party and indicating a particular instrument associated with an issuer;
(b) retrieving restrictions associated with the particular instrument from a collection of restrictions;
(c) accessing a compliance rule set identifying at least one compliance rule selected in accordance with a profile associated with the party, the profile reflecting at least the relationship between the party and the entity;
(d) evaluating at least a portion of the rules in the compliance rule set using the retrieved restrictions to determine if the request complies with the restrictions; and
(e) outputting a message in electronic form indicating a compliance condition in accordance with results of the evaluating step.

### Claim 2 (depends on 1)

The method of claim 1, wherein each compliance rule has an associated priority, the priority indicating an order in which the rules are applied during the evaluating step.

### Claim 3 (depends on 2)

The method of claim 2, wherein the restrictions are indicated in a plurality of lists including a first list indicating restrictions related to publicly available information and a second list indicating restrictions related to non-public information; the priority of rules applying to the first list being greater than the priority of rules applying to the second list.

### Claim 4 (depends on 1)

The method of claim 1, wherein:
the restrictions are indicated in least a first list and restrictions in the first list have an associated severity level;
the step of retrieving comprising retrieving restrictions from the first list wherein, if a plurality of restrictions associated with the particular instrument is in the first list, retrieving from the first list only the restriction associated with the particular instrument having the highest severity level.

### Claim 5 (depends on 1)

The method of claim 1, wherein restrictions are transaction restrictions and each restriction has an associated severity level selected from a group comprising at least one of a low severity indicating that transactions are permitted for a party in a first category and not permitted for a party in a second category, and a high severity indicating that transactions are not permitted for any party.

### Claim 6 (depends on 5)

The method of claim 5, wherein the first category comprise customers of the entity and the second category comprises employees of the entity.

### Claim 7 (depends on 5)

The method of claim 5, wherein the severity group further comprises a medium severity indicating that transactions are permitted only with additional approval.

### Claim 8 (depends on 1)

The method of claim 1, wherein the step of accessing a compliance rule set comprises:
accessing a baseline rule set;
accessing at least one additional rule set selected in accordance with the party profile;
and combining the accessed baseline rule set and the at least one additional rule set to form the compliance rule set.

### Claim 9 (depends on 8)

The method of claim 8, further comprising the steps of:
accessing rule exception data selected in accordance with the party profile; and
removing rules from the compliance rule set in accordance with the rule exception data.

### Claim 10 (depends on 1)

The method of claim 1, wherein the request is received from the party and the message is sent to the party.

### Claim 11 (depends on 1)

The method of claim 1, wherein the request is received from an electronic trading system and the output message is sent to the electronic trading system.

### Claim 12 (depends on 1)

The method of claim 1, further comprising the steps of:
logging requests where a determination is made that the request violates the restrictions;
re-executing steps (b)-(d) on a periodic basis for logged requests;
if a re-execution indicates that a particular logged request does not violate the restrictions, outputting a message indicating the request approval.

### Claim 13 (depends on 1)

The method of claim 1, wherein the entity comprises a company and the party comprises one of an employee of the company, a customer of the company, and the company.

### Claim 14 (depends on 1)

The method of claim 1, wherein the compliance request comprises an electronic document containing data indicating a company name;
the method further comprising the steps of extracting the company name from the document and mapping the extracted company name to an associated instrument.

### Claim 15 (depends on 14)

The method of claim 14, further comprising the step of embedding the compliance condition message in a representation of the document.

### Claim 16

A computer implemented method for performing compliance checking on a transaction request associated with a party to determine if, in view of a relationship between the party and an entity, the transaction request complies with specified restrictions, the method comprising the steps of:
(a) providing a collection of compliance rules, at least some compliance rules having an associated priority;
(b) receiving a transaction compliance request having an associated party and indicating a particular instrument associated with an issuer;
(c) retrieving transaction restrictions associated with the particular instrument from a collection of restrictions;
(d) accessing a profile associated with the party, the profile reflecting at least the relationship between the party and the entity;
(e) generating a compliance rule set identifying at least one compliance rule in the collection of compliance rules by combining a baseline rule set and at least one additional rule set selected in accordance with the party profile;
(f) evaluating at least a portion of the rules in the compliance rule in order of the associated rule priorities using the retrieved restrictions to determine if the transaction request complies with the restrictions; and
(g) outputting a message in electronic form indicating if the transaction complies with the restrictions in accordance with results of the evaluating step.

### Claim 17 (depends on 16)

The method of claim 16, wherein the restrictions are indicated in a plurality of restricted transaction lists including a first list indicating restrictions related to publicly available information and a second list indicating restrictions related to non-public information; the priority of rules applying to the first list being greater than the priority of rules applying to the second list.

### Claim 18 (depends on 16)

The method of claim 16, wherein the step of generating further comprises accessing rule exception data selected in accordance with the party profile and removing rules from the compliance rule set in accordance with the rule exception data.

### Claim 19 (depends on 16)

The method of claim 16, further comprising the steps of:
logging transaction requests where a determination is made that the transaction does not comply with the restrictions;
re-executing steps (d)-(f) on a periodic basis for logged transaction requests; and
if a re-execution indicates that a particular logged transaction request does not violate the restrictions, outputting a message indicating approval of the transaction request.

### Claim 20 (depends on 16)

The Method of claim 16, wherein the entity comprises a company and the party comprises one of an employee of the company, a customer of the company, and the company.

### Claim 21

A system for performing compliance checking on a request associated with a party to determine if, in view of a relationship between the party and an entity, the request complies with specified restrictions, the system comprising:
a list server having access to data indicating financial instruments subject to restrictions and configured to receive a query indicating a particular instrument and return data indicating restrictions associated with the particular instrument;
a rules database comprising a plurality of compliance rules;
a profile database storing profile information for a plurality of parties, profiles reflecting at least the relationship between each respective party and the entity;
a rules engine connected to the rules database and configured to:
(a) receive a compliance request indicating a particular instrument and having an associated party;
(b) issue a query to the list server to obtain restrictions related to the particular instrument;
(c) access a compliance rule set identifying at least one compliance rule selected in accordance with a profile associated with the party, the profile reflecting at least the relationship between the party and the entity;
(d) evaluate at least a portion of the rules in the compliance rule set using the retrieved restrictions to determine if the request complies with the restrictions; and
(e) output a message in electronic form indicating a compliance condition in accordance with results of the evaluating step.

### Claim 22 (depends on 21)

The system of claim 21, wherein the system further comprises an account database associating accounts with respective parties;
the request comprising a transaction request and specifying a transaction account;
the rules engine being further configured to access the account database using the specified transaction account to determine the party.

### Claim 23 (depends on 21)

The system of claim 21, wherein the restrictions are contained in a plurality of lists, wherein restrictions on a specific instrument can appear in multiple lists and multiple times in a single list;
the list server comprising a list cache configured to store transaction restriction data from the plurality of lists.

### Claim 24 (depends on 21)

The system of claim 21, wherein each compliance rule has an associated priority, the rules engine being configured to evaluate rules identified by the compliance set in order of priority.

### Claim 25 (depends on 24)

The system of claim 24, wherein the restrictions are indicated in a plurality of lists including a first list indicating restrictions related to publicly available information and a second list indicating restrictions related to non-public information; the priority of rules applying to the first list being greater than the priority of rules applying to the second list.

### Claim 26 (depends on 21)

The system of claim 21, wherein:
the restrictions are indicated in least a first list and restrictions in the first list have an associated severity level; and
the list server is configured to return from the first list only a restriction associated with the particular instrument having the highest severity if a plurality of restrictions associated with the particular instrument are in the first list.

### Claim 27 (depends on 21)

The system of claim 21, wherein the restrictions are transaction restrictions and each restriction has an associated severity level selected from a group comprising at least one of a low severity indicating that transactions are permitted for a party in a first category and not permitted for a party in a second category, and a high severity indicating that transactions are not permitted for any party.

### Claim 28 (depends on 27)

The system of claim 27, wherein the first category comprise customers of the entity and the second category comprises employees of the entity.

### Claim 29 (depends on 27)

The system of claim 27, wherein the severity group further comprises a medium severity indicating that transactions are permitted only with additional approval.

### Claim 30 (depends on 21)

The system of claim 21, wherein the rule engine is further configured to:
access a baseline rule set:
access at least one additional rule set selected in accordance with the party profile; and
combine the accessed baseline rule set and the at least one additional rule set to form the compliance rule set.

### Claim 31 (depends on 30)

The system of claim 30, wherein the rule engine is further configured to:
access rule exception data selected in accordance with the party profile; and
remove rules from the compliance rule set in accordance with the rule exception data.

### Claim 32 (depends on 31)

The system of claim 31, wherein the rules engine is further configured to:
log requests where a determination is made that the request violates the restrictions;
re-execute request a compliance checks on a periodic basis for logged requests; and
if a re-execution indicates that a particular logged request is does not violate the restrictions, output a message indicating the request approval.

### Claim 33 (depends on 21)

The system of claim 21, further comprising:
a document processor in communication with the rule engine and receiving a document in electronic-form as input;
the document processor being configured to:
extract company names from the document;
map the extracted company names to product identifiers;
issue compliance requests to the rules engine for the product identifiers; and
produce an output indicating if the document does not comply with the restrictions in accordance with the compliance condition message output from the rules engine.

### Claim 34 (depends on 33)

The system of claim 33, wherein the output of the document processor comprises a representation of the document having embedded compliance condition data therein.

### Claim 35

A processor-implemented method for performing compliance clearance of a requested transaction, comprising:
(a) receiving a set of inputs to a transaction request form via a communications network, the set of inputs including at least a participant identifier and a security identifier for a security involved in a requested transaction;
(b) retrieving at least one security status list from a list server based on the security identifier, wherein the security status list comprises a security status list identifier and a list of security identifiers associated with securities that are subject to a given transactional status;
(c) retrieving at least one participant profile from a user profile database based on the participant identifier;
(d) extracting a plurality of hierarchically ordered participant characteristics from the at least one participant profile;
(e) dynamically generating a compliance ruleset based on the plurality of hierarchically ordered participant characteristics by
(i) selecting a baseline ruleset based on a most-general participant characteristic and
(ii) selecting at least one auxiliary rule set based on a specific participant characteristic,
(iii) wherein the compliance rule set comprises a plurality of rules configured as logical expressions which take as inputs at least one security status list identifier, and
(iv) wherein the plurality of rules have an associated evaluation order specifying the order in which the rules are to be evaluated;
(f) evaluating the plurality of rules in the compliance rule set based at least on the security status list identifier to generate a compliance clearance status;
(g) generating a compliance clearance status data record comprising the compliance clearance status in association with the requested transaction; and
(h) periodically reevaluating the plurality of rules in the compliance ruleset for a compliance clearance status indicating a rejected transaction.