Launched in 2017, Diginex listed on Nasdaq in September 2020 under the ticker “EQOS”.  Over the summer of 2021, Diginex announced that it would rebrand under the name EQONEX Group, bringing together its cryptocurrency exchange, custody platform, multi-venue trading business, over-the-counter (OTC) offering, its asset management solution, securitisation business and the upcoming investment products and borrowing and lending businesses.

EQUOS, the cryptocurrency exchange is now EQONEX and Diginex Capital, the digital asset securitisation business rebranded to EQONEX Capital. The investment products business is EQONEX Investment Products, and the anticipated borrowing and lending platform is EQONEX Lending.

ClauseMatch is a London-based regulatory technology company that enables financial institutions and other regulated companies to comply with their internal corporate governance documentation (standards, procedures, controls). It is a 2014 graduate of the inaugural Barclays accelerator programme. The solution brings productivity and transparency for the Compliance, Legal, Finance, Operations, and Risk team resulting in cost-saving, reducing risk, and providing accountability.

Project scope

The adoption of distributed ledger technology and cryptocurrencies are defining a new era for global financial markets. Being agile with compliance is of high importance for a dynamic company working with digital assets across several jurisdictions. This was especially true for Diginex following its listing on Nasdaq. Implementing the ClauseMatch solution prior to its rebrand, the then Diginex wanted to achieve agile, robust policy and procedure management, hitting efficiencies, improving the quality and standardisation.

Implementation

ClauseMatch was implemented at the company’s head office located in Hong Kong. ClauseMatch was initially deployed within the compliance department; however, the platform is now being used across the entire company structure involving back and front office, communicating the policies to all the employees across the geographies.

The total implementation time for ClauseMatch was two months. The project went live at the end of April 2020 after a successful 1-month POC and a 1-month implementation. ClauseMatch claims such projects can be delivered in a month depending on the size of the organisation.

The implementation team consisted of Chief Compliance Officer on behalf of Diginex (EQONEX), a technical architect, a two-member implementation team, and a regional manager on behalf of ClauseMatch.

ClauseMatch solution

ClauseMatch brings in the automation of regulatory change management processes through effective internal policies, standards, procedures, and controls across its corporate structure (legal entities), geographies, products and services (licences), and supervisory authorities. The ability to automatically assess and adapt to regulatory change brings control, risk reduction, cost-savings, and efficiencies. As all organisations have unique needs for their compliance, there is no turn-key solution in managing compliance. Hence everything needs to be adjusted to an organisation’s goals and the way it manages internal governance.

Solution attributes

From this project, Diginex (EQONEX) received a centralised repository of internal policies and standards and regulatory obligations. This meant documents from all risk and compliance areas were centralised and linked in the appropriate hierarchy. The solution allowed real-time collaboration on policy documents and a full audit trail with people working on the same document always having the latest version. It kept the traditional user experience, helping ease adoption with all changes, comments, approvals, and other metadata captured at each paragraph for a comprehensive audit trail.

The solution also provided mapping between content by connecting related content at paragraph-level (for example: regulatory obligations to policies, procedures to internal controls, etc.). Additionally, there were algorithms to learn, maintain, uncover related content, and suggest new mappings. Some additional attributes were a policy portal for end-users with readership and attestation rights, mobile devise access, and version control.

Key benefits

Using ClauseMatch’s regulatory technology, Diginex (EQONEX) managed all the policies in an agile manner on a single system with the facility to share the documents and collaborate on them in real-time. There was an audit trail with all the approvals and comments. A comprehensive full audit trail delivers accountability, transparency, and assurance into readiness for the next review of current governance documentation, internal controls, and their links to the applicable regulations.

The effective mapping between policies, procedures, controls on a granular paragraph level, linking and mapping regulations to internal policies, and applying AI algorithms on top. The solution eliminated the necessity to do a manual search for a certain place in a document.

Structured workflow increased operational efficiency through the lower investment of staff time and consultancy fees, shorter audits and impact assessment cycles, increasing shareholder value, and freeing up business to focus on growth and innovation.

The solution was well received by the client, with the Chief Compliance Officer commenting, “Automating regulatory compliance is important whether you are an international bank or a FinTech startup. Even though Diginex is a relatively small team, there is a huge value from applying ClauseMatch technology. All the benefits make a very strong proposition when you’re used to using a very effective tool. This is very important as you scale, changes automatically apply, and you can see what parts of internal governance documents are exactly affected. Ultimately, we can guarantee the quality of services we are providing to our customers around the globe, even during such hectic times.”

IBSI view

Using the solution, Diginex (EQONEX), benefited from better enterprise governance and proactive regulatory risk mitigation through a 360-degree live view into its current state of compliance with regulatory obligations, further enabling streamlining impact assessment and implementing existing and future regulations.

KEY FACTS

Financial Institution: Diginex (EQONEX)
Headquarters: Hong Kong SAR
Solution partner: ClauseMatch
Timeline: 2 months for the roll-out