ComplianceAlert

SEC Tackles ESG Investing and Compliance

The SEC’s Division of Examinations (EXAMS) issued a key Risk Alert (the “Alert”) that tackles the thorny compliance issues surrounding ESG (Environmental, Social, and Governance) investment themes. EXAMS has conducted reviews of RIAs and funds that follow ESG strategies and compiled a list of both positive and negative findings from those examinations. RICS (Registered Investment Companies), private funds, and SMAs (Separately Managed Accounts) were all included in the ESG targeted examinations conducted over the last…

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SEC may pursue regulatory measures for family offices (InvestmentNews)

Family offices do not have a requirement to register with the SEC, but fallout from the Archegos implosion is creating momentum for greater regulatory oversight of these entities. Amy Lynch, FrontLine’s Founder and President, states that currently there are few mechanisms for the SEC to monitor family offices and their funds. She notes, however, that most are smaller firms that concentrate on managing family wealth, whereby exemption from SEC registration makes sense. Absent of a…

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FrontLine’s Founder goes live at opening of Asian markets (CNBC Asia)

FrontLine’s Founder and President Amy Lynch was called on as a regulatory compliance expert for CNBC Asia’s “Squawk Box” show to discuss the Archegos market event. Appearing live just prior to the Asian markets open, Ms. Lynch discusses whether similar margin call “blow-ups” causing huge financial losses could occur again in the current market environment. She further explains how the due diligence of the involved banks and their prime brokers’ account opening processes may have…

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Power shifts in Congress seek greater controls around private funds (FundFire)

The legislative agenda being formed by the Democratic majority and its leaders looks to be in step with the SEC’s regulatory objectives for the private fund industry. While ESG related priorities are now a central focus for both Congress and regulators, according to FrontLine’s Founder and President Amy Lynch, many activities of private funds will be given a closer look. Ms. Lynch sees not only the typical historical exam areas for private funds being ramped…

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Use of leverage underlying Archegos margin call raises concerns (MarketWatch)

Certain types of swaps and other derivatives were the primary securities involved that led to the recent Archegos Capital margin calls. The subsequent fallout resulted in major financial losses at some banks, including Credit Suisse’s and Nomura’s prime brokerage businesses. The types of leveraged trades utilized, including CFDs, may be something that the SEC and other regulators weigh in on following their review of the situation, comments FrontLine’s Founder and President Amy Lynch. Ms. Lynch…

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