Charles Schwab Corp. (SCHW) has announced a deal to acquire Chicago-based Compliance11 Inc., a firm providing cloud-based, regulatory compliance software. The company is planning to integrate the acquired firm into its Designated Brokerage Services (DBS) business.

Although Schwab did not disclose the financial terms, it stated that the acquisition is expected to close by the end of this year, pending customary closing conditions.

Compliance11 is a leading provider of cloud based compliance automation software for public companies, brokerage firms, hedge funds, investment advisors, private equity firms and pension funds. The firm offers a wide range of compliance tools that assist in managing disclosure, tracking, surveillance and reporting needs.

For more than 15 years, Schwab’s DBS business has been offering employee trade monitoring services to employers in regulated industries. Presently, the unit serves about 650 corporate relationships with nearly $30 billion in assets for 130,000 employee accounts. Additionally, DBS provides all the products and services that Schwab offers.

Hence, with a large number of companies examining their employees’ investing and trading activities to ensure compliance with industry regulations, Schwab’s decision to buy Compliance11 will benefit the company in the long run.

Further, Schwab’s DBS clients will get one-stop solutions and will also be able to integrate and rationalize their method of monitoring employee trades to comply with regulations, thereby avoiding potential delays and inefficiencies.

Following the completion of Compliance11 acquisition, Schwab’s financials will reap longer-term benefits. Further, the deal would also give an impetus to Schwab’s strategy to expand its DBS business.

Currently, Charles Schwab retains a Zacks #3 Rank, which translates into a short-term Hold rating. Similarly, one of its peers E*TRADE Financial Corporation (ETFC) also retains a Zacks #3 Rank.

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