Wed, Jan 28, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Kinetic Partners issues guidelines for investment advisers on how best to prepare for impending regulatory changes in U.S.

Wednesday, May 19, 2010
Opalesque Industry Update – Kinetic Partners, a leading regulatory consultancy to the hedge fund industry, today issued guidelines for investment advisers on how best to prepare for impending regulatory changes.

At least 26 proposed bills this past year have focused on U.S. financial regulatory reform and it is likely that they will be consolidated and amended into a single bill called the Wall Street Reform and Consumer Protection Act of 2009, including a provision for greater regulation and transparency of most managers of privately pooled investment vehicles.

Historically, many firms have enjoyed an exemption from regulation by the SEC under the Investment Advisers Act of 1940, but changes will affect almost all hedge fund, private equity and venture capital managers that are not currently SEC registered in the very near future.

Advisers need to understand the SEC registration requirements, develop a compliance infrastructure and culture, and ensure that adequate resources and expertise are available. Unregistered advisers should conduct substantive meetings with the firm’s various departments and fund entities to assess any specific compliance weaknesses that may exist. The front office, traders (and assistants), research, operations, accounting, and risk heads need to clearly understand their roles and responsibilities within the compliance infrastructure. Advisers that are already registered with the SEC should also monitor the proposed legislation with particular attention to the potential increase in disclosure requirements.

Key components of a robust compliance program include the appointment of a chief compliance officer and preparation of a compliance manual.

In addition, firms should prepare a Risk Assessment Matrix (RAM) with clearly stated policies with respect to both perceived and actual risks. The RAM should detail how the firm will mitigate each risk in all areas of the firm, including portfolio risk, cash controls and cash transfers, insider trading, reporting errors, and client conflicts.

“While the proposed bill is still being finalized, and there is currently no confirmed timetable, it is widely expected that an amended and final version will be put before President Barack Obama before the end of the summer. If signed, there is likely to be an implementation period of 6 to 12 months. Regardless of the timetable, however, firms must ultimately be able to substantiate to the SEC their ability to maintain appropriate systems and controls. This cannot be a static process, and the planning should begin now,” said Kinetic Partners’ Member, Neil Morris.


Kinetic Partners is a global professional services firm providing forensic, corporate recovery, regulatory risk and compliance, tax and audit and assurance services to the asset management industry. Launched in 2005 as a viable alternative to the ‘Big Four’, Kinetic Partners has grown rapidly, and has almost 100 professional staff in London, Dublin, Grand Cayman, New York and Geneva. Kinetic Partners services over 850 clients, and has attained its reputation as the leading provider of consultancy services to hedge funds worldwide. Source


Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  2. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  3. Top performing private equity firms you should invest in[more]

    Komfie Manalo, Opalesque Asia: Professor Oliver Gottschalg of Paris-based HEC Business School, also known as Ecole des Hautes Etudes Commerciales de Paris has released his annual ranking of the top performing private equity firms. The 2014 HEC-DowJones Private Equity Performance Ranking

  4. Comment - Why invest in hedge funds if they don't outperform the market?[more]

    From Forbes.com: Hedge funds have always been a bit exotic and an enigma to some, but bottom line they are supposed to produce good returns using a range of strategies including global macro, event driven and relative value (arbitrage). And, sophisticated or high-net-worth individuals (HNWIs) could

  5. Owen Li 'truly sorry' for blowing up $100m of hedge fund’s assets[more]

    From CNBC.com: A hedge fund manager told clients he is "truly sorry" for losing virtually all their money. Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March. "I take r