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SD-10.6 — Sanctions & Prohibited-Issuer Screening

Business Domain: BD-10 Investment Compliance & Guideline Monitoring (Middle office) · Applies: BOTH

Purpose

Screens the issuers, counterparties and investee assets the firm deals with against sanctions and prohibited-party lists — confirming the portfolio does not hold, and the firm does not trade with, a sanctioned or prohibited entity. SD-10.6 exists because a sanctioned issuer is, functionally, a barred security: holding it is a compliance breach and, often, a legal one. It screens the things the portfolio touches — issuers, trading counterparties, private-markets investee companies — against the OFAC, EU, UN and OFSI lists. It is the portfolio-side of financial-crime control. The firm-side financial-crime function — investor and LP know-your-customer checks, AML transaction monitoring — is firm-wide compliance, BD-14’s, not BD-10’s.

Service Operations

  • Screen issuers — check the issuers of the securities the portfolio holds or proposes to hold against the sanctions and prohibited-party lists.
  • Screen counterparties — check trading counterparties, brokers and agents against the lists before and during a relationship.
  • Screen private-markets investees — for direct and co-investments, screen the target company, its principals and its key counterparties at deal approval.
  • Maintain the prohibited-party lists — keep the screening lists current as sanctions regimes change, and resolve the matches and false positives.
  • Report screening results — produce the screening evidence and escalate confirmed matches.

Inputs and outputs

  • Inputs: OFAC / EU / UN / OFSI sanctions and prohibited-party lists; the issuer and counterparty data from SD-13.2 Entity & Counterparty Master; the investment pipeline from SD-04.5.
  • Outputs: screening results and confirmed-match escalations — consumed by SD-10.1 (enforced as a pre-trade rule), SD-10.8 (a confirmed match is a breach), SD-06.1 and SD-06.3 (counterparty eligibility), and BD-14.

Entities

  • Consumes: E-01 Legal Entity (issuers, counterparties, investees), E-02 Instrument / Asset, E-03 Portfolio / Mandate; the SD-04.5 investment pipeline; the SD-13.2 issuer and counterparty data.
  • Owns: none — sanctions screening runs over the legal-entity master SD-13.2 owns and the external sanctions lists. The maintained prohibited-party lists are an open extension, shared in shape with the SD-10.4 restricted lists.

Standards

  • The OFAC, EU, UN and UK OFSI sanctions regimes.
  • The FATF Recommendations — the financial-crime frame the firm-side AML function (BD-14) works to; named here as the boundary.

Open extensions

  • A Prohibited-Party List entity, shared with SD-10.4.
  • The screening-and-match sub-model — match scoring, false-positive resolution.
  • The Service-Operation-level input/output contracts.

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