Government shutdown could impact SEC in some ways (InvestmentNews)

With a potential shutdown of the Federal government days away, one of its primary regulators could be feeling an impact. At the SEC, many of its employees would be on furlough during a shutdown, with some employees remaining on the job for essential functions. SEC exams and enforcement cases would proceed, but at a slower pace. Amy Lynch, FrontLine’s Founder and President, has first-hand knowledge of how the SEC performs during a shutdown when at…

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Few fund accountants allow for rising independence issues (IGNITES)

With only a few accounting firms handling most fund audits, fund companies may face greater regulatory scrutiny regarding their auditor’s independence. Recent data shows that only five accounting firms worked with over 78% of all fund companies. FrontLine’s Founder and President Amy Lynch comments that fund directors should prepare for more reviews of their auditor’s role since conflicts and independence issues can be more prevalent with only a few accounting firms conducting the vast majority…

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ComplianceAlert

SEC reveals its examination strategy

The SEC recently released a Risk Alert (“the Alert”) from the Division of Examinations on how it goes about selecting firms for examination. This is a first of its kind Alert since traditionally the Staff has not released its examination strategy and registrant selection process. The Alert even includes a chart that shows the items on its initial document request letter to registered advisers. The goals of the Division of Examinations are to: Promote compliance…

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SEC eyes certain marketing documents for its exams (ThinkAdvisor)

When the SEC comes knocking for a Marketing Rule exam, there will be a host of marketing-related materials and data that the regulator will be requesting. Amy Lynch, FrontLine’s Founder and President, is profiled in a recent ThinkAdvisor article where these items are detailed in length. She describes the various types of documents and information the SEC is most interested in seeing during an exam as they pertain to the Rule. In June, the SEC…

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ComplianceAlert

SEC’s New Private Fund Rules Alter Landscape

The private fund industry has a new compliance hurdle to reach with the SEC’s newly adopted Private Fund Rules (“the Rules”). On August 23, 2023, the Commission voted 3-2, along party lines, to adopt new rules (a total of five) under Section 211(h) of the Advisers Act. The SEC determined that new rules were needed for the private fund industry in order to address: Lack of transparency in private funds Conflicts of interest Lack of…

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