Users with Administrator rights can deactivate rules within the system. Stating the obvious, deactivating a rule means the rule will not be checked whenever a positions file is uploaded to the system.

The risk of deactivating a rule is always the potential to miss actual disclosure requirements that trigger in the system. This article focuses on three reasons you may consider deactivating rules and explains the potential risks associated with them.

This is probably the worst of all reasons for deactivating a rule! There are many reasons why a security might be disclosable in a specific jurisdiction: listing of the security, incorporation of the issuer, or something else. There are issuers that are incorporated in Norway but regulated in Luxembourg and have their shares listed in Korea. Issuers like that would potentially trigger three disclosure requirements at the same time. If a user only holds European securities and hence thinks that only the European rules should be monitored, it is tempting to deactivate the Korean rule. However, as in the example above, deactivating this rule could easily lead to a missed disclosure.

Deactivating a rule because it is believed that the specific regulation does not apply can be valid enough at a given moment in time. A rule might not apply because the user falls under an exemption or similar provision. However, it can happen that the exemption no longer applies because the regulation changes or the firm has the exemption removed due to firm-side structural changes. This might not be something that a user will be aware of immediately, and valid disclosures might not be identified because the rule is deactivated.

We believe that we have a comprehensive service that spans a wide range in terms of the number of regulations we monitor, but also captures many nuances in these regulations. Having another system that monitors specific regulations is, in essence, fine; however, our evaluation of whether a disclosure is required is a useful backup for identifying potential filing requirements. Further, we would always be interested in hearing why another solution outside the platform would be preferred over our rules, which all other clients use.

We appreciate that missing data items may cause a number of Unknowns to appear in the Result Dashboard. Whilst awaiting the resolution of these items, clients should avoid deactivating rules, as this will prevent the system from running checks on all rules. A more prudent approach would be to ensure that rules remain active, as this prevents situations where rules may be turned off without all users being notified, which could cause missed results once data issues are resolved and rules are not reactivated. For more information on addressing Missing Data alerts, please see the following articles linked here and here.