Client Background

This US-based institutional broker-dealer provides investment banking and capital markets services — including equity offerings, follow-on offerings, and structured financing — to public and private companies seeking to raise capital. As an SEC-registered firm and FINRA member, it operates under stringent regulatory obligations covering KYC due diligence, AML compliance, and sanctions screening for every Issuer it works with.

In the capital markets context, an “Issuer” is a company that raises funds by issuing securities. Before a broker-dealer can facilitate a capital raise for an Issuer, it must perform thorough KYC due diligence on that company — including its directors, major shareholders, and related parties — and continue monitoring that relationship for compliance risks throughout its duration.

The Challenge

As the firm’s pipeline of Issuer relationships grew, managing KYC due diligence and ongoing compliance monitoring manually became increasingly difficult to sustain in a structured, auditable way — particularly given the pace at which capital markets transactions move.

The Solution

KYCsphere was deployed as the firm’s central compliance platform for managing KYC due diligence and AML screening across all its Issuer relationships. Each Issuer is onboarded into KYCsphere as a structured entity record — with its directors, key shareholders, and related parties profiled and screened from day one — giving the compliance team a complete, auditable picture of every relationship it manages.

How It Works — The Issuer Compliance Lifecycle

1. KYC due diligence at onboarding — when a new Issuer relationship begins, the company and all key associated individuals are onboarded into KYCsphere. Sanctions, PEP, and adverse media screening runs immediately, giving the compliance team a thorough due diligence record before the engagement proceeds.
2. Ongoing monitoring throughout the relationship — KYCsphere continuously monitors every Issuer and related party for sanctions designations, PEP status changes, and adverse media. Any new finding triggers an automatic alert to the compliance team.
3. Risk-rated alert review — alerts are automatically prioritised by risk rating, allowing the compliance team to focus on the highest-risk findings across all active Issuer relationships without being overwhelmed by false positives.
4. Complete audit trail per Issuer — every screening result, alert review, and compliance decision is logged against the Issuer’s record in KYCsphere, maintaining a full, documented compliance history that can withstand SEC and FINRA examination.

The Results

With KYCsphere managing KYC and AML compliance across its Issuer relationships, the firm now has a consistent, automated, and fully documented compliance programme — meeting its SEC and FINRA obligations without the manual overhead that previously made systematic compliance difficult to sustain.

• Structured KYC due diligence on every Issuer— a consistent onboarding process ensures every Issuer and its key people are thoroughly screened and documented before any engagement proceeds.
• Automated sanctions and PEP screening— every Issuer and associated individual is screened automatically at onboarding and through ongoing periodic scans, with a complete auditable record maintained for every check performed.
• Proactive ongoing monitoring— the firm is alerted immediately if any Issuer or related party is sanctioned, identified as a PEP, or attracts adverse media at any point during the relationship — rather than discovering risks reactively.
• Single compliance record per Issuer— all due diligence, screening results, alerts, and review decisions are held centrally against each Issuer’s record, giving the firm a clear, documented compliance history across all its relationships.
• Examination-ready at all times— the complete audit trail maintained by KYCsphere means the firm can demonstrate its KYC and AML compliance programme to SEC and FINRA examiners with confidence at any time.