Thu, Apr 2, 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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Opalesque Roundtable: Emerging managers should avoid chasing 'institutional unicorns'[more]

    Bailey McCann, Opalesque New York: For managers looking to raise a new fund after the crisis, marketing efforts will need to be significantly different, according to delegates at the recent Opalesque Texas Roundtable. "Most of the smaller managers come to the whole fund-raising and marketing

  3. Cohen's private investments deliver strong 7.5% gain in Q1[more]

    From Reuters.com: Billionaire Steven A. Cohen's investments gained 7.5 percent in the first three months of 2015, according to a person familiar with the numbers, helping the former hedge fund manager extend his string of market-beating returns. Cohen's Point72 Asset Management, which invests

  4. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

  5. Opalesque Exclusive: Cyber security and hedge funds: increased awareness, Part One[more]

    Benedicte Gravrand, Opalesque Geneva: If you look at the recent cybersecurity news from Bloomberg, hackers are frightening the people: they steal photos and threaten to expose them, they can break into ATMs, they ha

 

banner