On November 29, 2017, HFM Week reported that at the MFA Outlook event held in New York City, U.S. Securities and Exchange Commission ("SEC") Chairman Jay Clayton confirmed that the agency will continue to focus on hedge fund managers and their compliance policies and procedures. Chairman Clayton’s statement appears to be in line with other agency communications and reports we have seen this year.
In Chairman Clayton’s testimony before the Committee on Banking, Housing and Urban Affairs earlier this year, he referenced the reassignment of 100 staff members to the investment adviser exam team and the advances in technologies that will keep the SEC on track to deliver on a 30% increase in the number of exams in FY2017. In the report issued earlier this month, the SEC confirmed this increase and revealed that its National Exam Program had examined 15% of registered investment advisers in FY2017, the highest percentage in over 10 years. In addition, Chairman Clayton noted that he expects examination numbers to increase again next year.
Hedge fund advisers can rarely predict when the SEC will announce an examination and, therefore, it is imperative that you are prepared in advance.
How ACA Can Help
ACA Compliance Group works closely with hedge fund managers to review, test, and enhance their policies and procedures. We assist with mock SEC and mock cyber exams to help identify areas for improvement before the regulators can. We also deploy technology and offer services that focus on managing your compliance program workflows, trade surveillance, and submitting Form PF and Form 13F. We also assist with marketing and advertising reviews and with reviewing investment performance calculations.
Our extensive experience gained from working with 2,800 clients globally, including 80% of the top 100 hedge funds*, provides valuable insight and knowledge of the operating and regulatory concerns that hedge fund managers need to address, and that appear to be of continued focus for Chairman Clayton and the SEC staff.
For More Information
For more information about our compliance services, or if you have questions about these recent statements, please contact Greg Mekanik or your regular ACA consultant.
Over the last few months, ACA has issued several compliance alerts and hosted webcasts to provide additional information and insight on regulatory initiatives and compliance concerns. Below are some of the resources that are available to you.
- SEC Exams Highest in Over 10 Years
- ACA Compliance Group Named Best Advisory Firm - Regulatory and Compliance at the 2017 HFM US Hedge Fund Services Awards
- OCIE Publishes Marketing Risk Alert
- SEC Announces Cyber Enforcement Initiatives
- 5 Things Investment Advisers Need to Know about Regulatory Investment in Trade Surveillance
- The SEC’s New Position on Virtual Currency: What Investment Advisers Need to Know
- SEC Surprise Examinations are Back
- SEC’s OCIE Releases Key Observations from 2015-2016 Cybersecurity Examinations
- SEC Chairman Jay Clayton Notes Increase in Adviser Exams and Commitment to Expanding Technology
- Regulators Requesting More Complex Trading Data as Part of Investment Adviser Exams — What Your Firm Needs to Know
- What Investment Advisers Need to Know about Regulatory Cybersecurity
- Compliance Corner Q4-2017: Regulatory Filings and Other Considerations That Hedge Fund Managers Should Note in the Coming Quarter
- Compliance Corner Q3-2017: Regulatory Filings and Other Considerations That Hedge Fund Managers Should Note in the Coming Quarter
For more alerts and insights, click here.
- Regulatory Cybersecurity Preparedness
- SEC Trends and Initiatives
- Best Practices for Presenting Model Performance
- Effective and Compliant Employee Monitoring
- Be Prepared for Your SEC Examination: Maintaining Proper Books and Records
- Briefing: Regulatory Investment in Trade Surveillance – What You Should Know
- Marketing by Investment Advisers and Private Fund Managers
For a complete list of available webcasts, click here.
*Top 100 hedge fund managers as noted in the April 26, 2017, edition of Hedge Fund Alert.