SEC Finds Deficiencies in Disclosing Conflicts of Interest and MNPI

The Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) recently published the Risk Alert Observations from Examinations of Investment Advisers Managing Private Funds. 

 

The Risk Alert covers three general areas of deficiencies that the OCIE has identified in examinations of private fund advisers: conflicts of interest, fees and expenses, and policies and procedures relating to material non-public information (MNPI). The alert outlines concerns and compliance issues observed during examinations of registered investment advisers that manage private equity funds or hedge funds—and serves notice that the SEC will continue to put a high priority on customer well-being.

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How Compliance is Reacting to COVID-19 Crisis

As most employees are now working from home, without a doubt, compliance has become more challenging and regulators expect firms to be prepared to manage the risks and challenges promptly. Compliance Week has run a survey to understand how prepared were compliance professionals and organizations for the COVID-19 pandemic.

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SEC Will Focus on Good Faith Efforts in Reg BI Enforcement

On April 7 the SEC published two Risk Alerts providing broker-dealers and investment advisors with information on the expected scope of initial Regulation Best Interest enforcement. The guidance indicated that initial exams will focus on evidence that firms have made “good faith” efforts to comply.

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SEC Holds Firm to the Reg BI Deadline of June 30, 2020

On April 2 the SEC issued a statement indicating that despite the disruption of the COVID-19 pandemic, the June 30, 2020 deadline for Regulation Best Interest (Reg BI) would not be deferred.

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Understanding the Regulatory Impact of COVID-19

The COVID-19 pandemic has brought unprecedented circumstances to the financial services industry and the world around us.

Amy Lynch, CEO of FrontLine Compliance, joined the Human Capital Podcast on March 20 to provide insight on the regulatory impact of the pandemic, emergency relief measures and recent guidance  including Form ADV extensions, Fund Board meetings, Business Continuity Plans, and virtual exams.

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