Compliance should be on heightened alert during regulatory shift (ThinkAdvisor)

FrontLine Compliance Founder and President Amy Lynch has a stern warning for CCOs and compliance departments: do not let your guard down. The SEC’s apparent shift to more “hands-off” regulation coupled with firms taking on more risk is a compliance disaster in waiting, she cautions. A recent industry report discussed in the ThinkAdvisor story shows that growth in asset management continues and would greatly outpace what is expected to be slowing regulation and less SEC oversight. Ms. Lynch sees this as a worst-case scenario for compliance as firms take on more risk. She emphasizes that CCOs need to be on heightened alert and on top of their game now more than ever. While the SEC turns its attention to more cases involving investor harm, the regulator continues to be hampered by staff shortages, with recent departures of 10 percent of its total staffing. Further, there is an expectation of less enforcement activity by the SEC, such as off-channel communications cases, as well as a toning down of rulemaking. According to Ms. Lynch, it’s all signaling that compliance departments will need to avoid complacency and stay vigilant. See ThinkAdvisor, “RIA Growth Could Stall in 2025: Report”