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Bailey McCann, Opalesque New York: The Securities Exchange Commission has published its examination priorities for 2013, which cover a wide range of issues at financial institutions, including broker-dealers, clearing agencies, exchanges and self-regulatory organizations, investment companies, hedge funds and private equity funds, and transfer agents. The regulator says that market-wide priorities include fraud detection and prevention, corporate governance and enterprise risk management, conflicts of interest, and technology controls.
For hedge funds specifically, newly registered funds will also have to take presence exams. The vast majority of new registrants are expected to come from hedge funds and private equity firms that are now required to register as part of the new rules implemented under Dodd-Frank. To deal with the influx of new registrants the SEC has launched a two-year, nationwide, multi-faceted campaign that is meant to "establish a meaningful presence with these newly registered advisers." In addition to nationwide testing, the campaign will also report back to the industry on its findings from interactions and exams with new registrants.
Focus areas for these exams may include issues such as ongoing risks. In its breakdown of priorities, the SEC notes that an on going risks section for hedge funds may include the following: "advisers ma...................... To view our full article Click here
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