Skip to content This library is free, offered as dana. If it helps your work, donate here →
penguin tree ai
← back to libraryDonate here

This is one of 3,622 free prompts in the penguin tree ai library. Sign up once and the whole library opens, with new prompts by email.

open the library →

Regulatory requirement interpreter

Translates raw regulatory text into a structured compliance brief covering plain-language obligation summaries, applicability scope, triggering conditions, required internal controls, evidence-of-compliance…

download .md

Purpose

Convert dense regulatory text into an actionable compliance brief that tells a firm exactly what it must do, whether the rule applies to them, and which internal controls satisfy each obligation. Eliminates the gap between "we received the rule" and "we know what to implement" for compliance teams operating across multiple jurisdictions.

When to Use

Invoke this skill when the user asks to:

  • Interpret a new regulation, rule, or regulatory guidance notice
  • Determine whether a specific rule applies to their firm or a business line
  • Translate legal/regulatory text into plain-language obligations
  • Map a regulation to the internal controls needed to comply
  • Assess an amendment to an existing rule and what changes for the firm
  • Compare how a requirement applies across multiple jurisdictions

Inputs Required

Before starting, collect:

  • Regulatory text: The raw rule, statute, guidance, or amendment (pasted or referenced by name and section)
  • Issuing authority: The regulator and jurisdiction (e.g., SEC, FCA, MAS, FinCEN, MiCA/ESMA)
  • Firm type: What the firm does — broker-dealer, crypto exchange, payment institution, asset manager, custodian, etc.
  • Regulated activities: The specific licensed or in-scope activities the firm performs
  • Client base: Retail / institutional / mixed, and geographies served
  • Existing controls context: Any current controls, policies, or systems already in place (optional)
  • Effective/compliance date: When the requirement takes or took effect, if known

If firm type or jurisdiction is missing, note the assumption made and flag that applicability analysis is provisional until confirmed.

Instructions

Step 1: Parse and Segment the Requirement

Break the regulatory text into discrete, atomic obligations. Do not summarize the rule as one block.

  • Identify each separate "shall," "must," "is required to," "may not," or prohibition
  • Number each obligation (Obligation 1, 2, 3…)
  • Preserve the source citation (section/article/paragraph) next to each so the user can trace back to the text
  • Distinguish mandatory obligations from conditional obligations (triggered only under specific circumstances) and prohibitions

Step 2: Plain-Language Summary Per Obligation

For each numbered obligation, write a 1–2 sentence plain-language restatement.

  • Remove statutory cross-references and legalese; state the substantive duty
  • Name the actor (who must comply — the firm, a specific function, a senior manager, a third party)
  • Name the action (what must be done)
  • Name the timing (deadline, frequency, or trigger — e.g., "within 30 days," "on an ongoing basis," "before onboarding")

Step 3: Applicability Scope Analysis

Determine whether and how each obligation applies to this specific firm. For each obligation, classify as:

  • Applies fully — the firm's activities squarely fall within scope
  • Applies partially — applies to a subset of activities, products, or client types (specify which)
  • Conditional — applies only if a threshold or trigger is met (state the trigger, e.g., AUM threshold, transaction volume, retail exposure)
  • Does not apply — with the specific exemption, carve-out, or scope limitation cited

Where jurisdiction matters, note extraterritorial reach (e.g., applies to clients located in the jurisdiction regardless of firm location) and any equivalence or passporting considerations.

Step 4: Map Obligations to Internal Controls

For each applicable obligation, recommend the specific control(s) that satisfy it. Use these control categories:

  • Policy/procedure — a documented rule, standard, or SOP the firm must adopt
  • Process/operational control — a workflow step, approval gate, or automated check
  • System/technical control — a monitoring, screening, recordkeeping, or reporting capability
  • Governance control — a committee, senior-manager accountability, board reporting line, or attestation
  • Training control — required staff or role-specific training

For each control, specify the owner (function responsible) and the evidence of compliance (what a regulator or auditor would ask to see — logs, records, reports, sign-offs, retention periods).

Step 5: Penalty and Enforcement Exposure

Summarize the consequences of non-compliance based on the text and known enforcement posture:

  • Stated penalties (fines, license conditions, suspension, criminal exposure)
  • Severity rating per obligation: Critical / High / Medium / Low based on penalty magnitude and likelihood of scrutiny
  • Note any personal liability for senior managers or named functions

Step 6: Prioritized Implementation Checklist

Produce a ranked action list ordering the obligations by a combination of severity, effective-date proximity, and implementation effort.

  • Rank Critical/near-deadline items first
  • For each item: the action, the owning function, and a realistic effort indicator (Quick / Moderate / Significant build)
  • Flag any obligation where the effective date has passed or is within 60 days as Immediate Priority

Step 7: Open Questions and Legal Review Flags

List points that require confirmation from external counsel or a regulator, such as ambiguous scope language, undefined terms, or areas where guidance is expected. Be explicit that these are interpretive flags, not legal advice.

Output Format

  • Structure: Obligation-by-obligation breakdown with a summary matrix, followed by prioritized checklist and open questions
  • Length: 1,000–1,500 words depending on the number of obligations parsed
  • Format: Structured document — numbered obligations with sub-fields; applicability and controls presented as a table where obligation count exceeds 5
  • Sections: Requirement Overview → Obligation Breakdown (per-obligation: summary, applicability, controls, evidence, severity) → Penalty Exposure Summary → Prioritized Implementation Checklist → Open Questions / Legal Review Flags
  • Tone: Compliance officer — precise, cautious, traceable to source; states applicability conclusions clearly but flags interpretive uncertainty rather than overstating certainty

Quality Checklist

Before delivering output, verify:

  • [ ] Every discrete obligation in the source text is numbered and cited to its section/article
  • [ ] Each obligation has a plain-language summary naming actor, action, and timing
  • [ ] Applicability is classified for every obligation (Applies fully / partially / conditional / does not apply) with cited reasoning
  • [ ] Each applicable obligation maps to at least one specific control with a named owner and defined evidence-of-compliance
  • [ ] Severity rating (Critical/High/Medium/Low) is assigned to every obligation
  • [ ] The implementation checklist is ranked, not listed arbitrarily, with effective-date-driven items flagged as Immediate Priority
  • [ ] Interpretive ambiguities are surfaced as open questions rather than resolved silently

Notes

  • This skill produces an interpretive compliance brief, not legal advice — always route final applicability conclusions and ambiguous terms through qualified counsel before implementation
  • For multi-jurisdiction analysis, run the skill once per jurisdiction and compare the applicability and control outputs to identify where a single global control satisfies multiple regimes versus where jurisdiction-specific controls are required
  • The highest-value output is usually the obligation-to-control mapping — regulators assess compliance by evidence, so weak evidence-of-compliance definitions are the most common audit failure point
  • When the text references defined terms (e.g., "eligible counterparty," "virtual asset service provider"), confirm the firm's activities against the exact definition rather than the colloquial meaning — scope hinges on definitions

How to use this skill

This file is a Claude Code skill in Anthropic's standard format — markdown with YAML frontmatter at the top.

Installing in Claude Code:

  • ~/.claude/skills/<folder-name>/SKILL.md — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)
  • <your-project>/.claude/skills/<folder-name>/SKILL.md — auto-loads only when working in that project (recommended for project-specific skills)

Restart Claude Code or open a new session to register.

Using in Claude.ai, ChatGPT, Gemini, or other AI tools:

  1. Drag this file into a new chat, or copy and paste its contents
  2. Send your task or request as your next message — the AI will apply the skill where it fits

For Claude Code skill details: https://docs.anthropic.com/en/docs/claude-code/skills