Amy Lynch explains why now is not the time to skimp on compliance (IGNITES)

The possibility for a market downturn may lead firms to consider reducing compliance when, in fact, they should be ensuring appropriate oversight is in place. With several comments in the IGNITES story, FrontLine Compliance Founder and President Amy Lynch emphasizes that preparation is key when signs point to a market downturn and possible recession. She states that funds in particular need to think ahead and create defensive positions, knowing that there could be more redemptions than purchases in their funds. Compliance should check to make sure there are enough liquid assets in funds to cover problems that could arise with market volatility. Ms. Lynch offers that investors could be persuaded to move assets from equity funds to bond funds, instead of pulling their money completely. Another key compliance measure she mentions is to review a fund’s prospectus language, which should outline how it will handle its portfolio in a market downturn. Finally, Ms. Lynch points out that while the SEC has signaled that it will have a lighter touch, that does not mean firms will get a pass since the SEC’s job still remains one of regulation and enforcement. See IGNITES (subscription required), “‘Don’t Skimp on Compliance’: Prepping for Market Volatility”