Risk Reward Limited announce strategic alliance with Compliance Edge Limited

1 August 2005

Risk Reward Limited is delighted to announce a strategic alliance with Compliance Edge Limited. Compliance Edge Limited (CEL), a specialist provider of compliance analysis, assessment and reporting products, today announced the availability of their new range of ComplySmart control risk self-assessment products

Compliance Edge Limited - Cutting the Cost of Complianceâ„¢
ComplySmart Product launch

ComplySmart Assessor for Basel is the first of a series of regulatory products to be launched by CEL. It builds upon CEL’s existing compliance activities and substantially reduces the burden of assessing and managing compliance with the Basel II Accord. The Accord and the associated Sound Practices paper contains over 1,000 clauses and footnotes that set out how banks should control their business risks from credit, operational and market-based activities and also how the capital requirements should be calculated.

ComplySmart Assessor works in two ways to reduce the burden of understanding this information. In the standard model firms can select the Credit and Operational Risk approaches that they have adopted from the following list:
Credit Risk Approaches Operational Risk Approaches

 Simplified Standardised  Basic Indicator
 Standardised  Standardised
 Foundation IRB  Advanced Measurement
 Advanced IRB  Partial Use

ComplySmart Assessor immediately shows the clauses and footnotes that are relevant for this selection and this simple step can reduce the compliance task by removing up to 50% of the clauses.

When a ComplySmart custom model approach is selected, the compliance officer not only selects the approach to use as above but also selects the business profile factors that apply from the following categories.

• Portfolio-specific options, e.g. sovereign assets, claims or exposures, etc
• Credit mitigation technique options, e.g. collateral, netting, guarantees, etc
• Book, modelling and securitisation options, e.g. trading book, securitisations, etc

Compliance Edge consultants use this information to quickly build a custom model that includes all the relevant information. Typically this custom analysis reduces clauses and footnotes by a further 10% to 20% and helps guide the company through the complexities of collateral and securitisations. ComplySmart Assessor shows the clauses and footnotes that are relevant for the firm in one list, whilst excluded clauses are available in another.

Rod Crook, COO, commented "ComplySmart Assessor is a compelling control risk self-assessment product for financial services compliance staff. With compliance consultancy costs soaring, hard-pressed compliance officers need to be able to access focused information using systems that proactively help them. ComplySmart is a product for which we offer continuous updates services so that month after month, year after year firms can derive a real competitive edge from their smart handling of regulatory compliance."

He also added "We are also extremely pleased to be working with Risk Reward Limited so that firms that need more detailed compliance and operational risk advice and guidance can benefit from their comprehensive consultancy services."

Dennis Cox, CEO of Risk Reward Limited added "We are looking forward to working with Compliance Edge Limited on its Basel framework product and also on its future regulatory products. With the systems expertise of Compliance Edge Limited combined with the domain expertise of Risk Reward Limited, we are able to provide institutions with a complete solution to the problems and challenges arising from the Basel accord and associated regulations."

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