Compliance Insights

Automating Employee Personal Trading

One of the main issues impacting compliance officers today is the difficulty of monitoring the personal trading activities of employees in accordance with best practice and industry regulations.  Adherence to rules such as SEC Rule 17j-1 and Rule 204A-1, and adoption of the best practices recommended by the SEC can be very time consuming and distracting for any compliance department.  Automation of the personal trading compliance process can save firms a lot of time as well as providing them with the ability to more easily analyze the data and check for trends in the data.

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Why Investment Advisers are Looking for Compliance Automation?

Investment advisers and registered hedge funds that are currently experiencing threats to their revenues are understandably reluctant to spend money on compliance management software. Yet the reality is that new regulations are inevitable as a response to the financial markets crisis, and compliance is going to require more resources. These coming changes will make it even more difficult to be a profitable firm, so choosing the right solution is important

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A Hosted Solution Revolution

Significant concern exists for investment advisory firms in addressing compliance requirements. Unfortunately, IT offerings have not, to this point, been able to provide a comprehensive solution at an affordable price-point. Although it is technologically possible to develop an IT solution providing comprehensive compliance monitoring, it often proves prohibitive because of the continually changing regulatory environment, the need for flexibility, and of course, cost considerations. A hosted solution over the Web can resolve many of these issues.

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Navigating the Evolving Regulatory Maze

To assist investment managers in pro-actively navigating the risky and ever-changing market and regulatory environment and to provide an outline for a flexible and robust risk-based compliance management methodology.

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Are You Caught Up In the Rumors?

have you heard? Regulators have begun examining how firms comply with rules that prohibit the intentional spread of rumors intended to manipulate securities prices. This is the latest example of how compliance teams are being challenged to manage a growing list of compliance activities, often with the same headcount.

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The Challenges for Investment Advisory Firms

Investment advisory firms face tremendous challenges in addressing compliance requirements. The costs associated with administering an effective program. The time needed for issue monitoring. The rapidly changing and increasingly complex regulatory environment. Demands from institutional prospects for proof of operational excellence. The need to demonstrate the effectiveness of programs to regulators. Addressing these issues takes time, money and expertise. Maintaining an effective program can be difficult for even the largest firms, so how do small and mid-sized firms stand a chance when faced with all of these issues?

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Why are the SEC expanding their New York office?

The Securities and Exchange Commission plan to expand their New York office this year as the financial regulator focuses more heavily on investigating hedge funds and brokerages. The agency's New York office plans to hire 18 people on the enforcement side, where it currently employs roughly 150 people, and add 15 people to its' examinations staff, which currently numbers about 210. The push to hire more lawyers, accountants and even former traders comes at a time when the agency is seeking to become more aggressive in going after firms and individuals on Wall Street.

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SEC Adopts More Aggressive Stance

New measures implemented by the SEC highlight their new, more aggressive attitude towards wrongdoing on Wall Street.

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Five steps to building an effective SEC Investment Adviser Compliance Program.

Building an effective SEC compliance program involves a great deal of effort and expense. If you are going to invest this effort and expense, then at a minimum, you should make sure that the program meets the requirements that the Securities and Exchange Commission have laid out. I have detailed below the five main steps that you need to have in place if you are going to build an effective compliance program. This is not an exhaustive list but it does cover the main areas that you should consider.

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Prevent Insider Trading - Ten Steps To Effective Employee Insider Trading Surveillance

In the securities industry, one of the chief concerns of compliance officers is monitoring the personal trading of employees in accordance with best practices and industry regulations. The following are ten steps a Compliance Officer can take to prevent insider trading within their firm.

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Hedge Fund Registration

Venture funds, private equity firms and hedge funds historically have been excluded from regulation under the ICA because of two exemptions in the definition of investment company, usually referred to as the 3(c)1 and 3(c)7 exemptions.  The 3(c)1 exemption is intended to exclude small private investment vehicles so long as there are 100 investors or less in each vehicle and the vehicle complies with the private offering requirements of the Securities Act of 1933 (including, for example, the requirement that  investors generally must be "accredited investors" to invest in such vehicles). 

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