Governance, risk, and compliance (GRC) is a critical aspect of any company’s operations, particularly when it comes to securities issuance and investor management. Strong GRC practices are essential for ensuring compliance with regulatory requirements and maintaining the integrity of financial records. In this article, we will discuss how to implement a robust GRC recordkeeping system for securities issuance and investor management, including regulatory reporting in secondary markets. We will also provide examples of the penalties that can result from poor recordkeeping and explain how XDEX from 10XTS can assist issuers in maintaining control as a master data management solution for digital tokenized securities.

  1. Implement a robust GRC recordkeeping system

A strong GRC recordkeeping system begins with a thorough understanding of the regulatory requirements that apply to your company and its operations. This includes understanding the specific reporting and recordkeeping requirements for securities issuance and investor management in the primary and secondary markets.

To implement a robust GRC recordkeeping system, companies should establish clear policies and procedures for recordkeeping and reporting, including designating specific individuals or teams to be responsible for maintaining financial records and ensuring compliance with regulatory requirements. It’s also important to regularly review and update the policies and procedures to ensure they remain in compliance with any changes in regulations.

  1. Regularly review and audit financial records

Regularly reviewing and auditing financial records is a crucial step in maintaining a robust GRC recordkeeping system. This includes reviewing and reconciling financial statements, as well as conducting internal audits to ensure compliance with policies and procedures. Any discrepancies or deviations from established policies and procedures should be investigated and addressed immediately.

  1. Utilize technology to improve recordkeeping and compliance

Technology can play an instrumental role in improving the efficiency and accuracy of recordkeeping and compliance. For example, XDEX from 10XTS can assist issuers in maintaining control as a master data management solution for digital tokenized securities. XDEX uses a blockchain-based platform that can create a tamper-proof, auditable record of all transactions, providing a secure and transparent way to manage and track securities, helping to mitigate the risk of financial mismanagement or fraud.

  1. Penalties and Consequences

Failure to comply with regulatory requirements and maintain accurate financial records can result in significant penalties, fines, and reputational damage for a company. Penalties can vary depending on the severity of the non-compliance and the jurisdiction in which the company operates, but they can include monetary fines, revocation of licenses, or even criminal charges.

Effective governance, risk, and compliance recordkeeping is essential for any company engaged in securities issuance and investor management, particularly in the context of secondary markets regulatory reporting. Implementing a robust GRC recordkeeping system, regularly reviewing and auditing financial records, utilizing technology to improve recordkeeping and compliance, and understanding the potential penalties for non-compliance can help to ensure compliance and mitigate the risks of financial mismanagement or fraud.

Contact 10XTS to discover how XDEX can help maintain your GRC records for your securities and investors.