Regulatory expert Amy Lynch on why private funds have the most on the line (Hedge Fund Alert)

The regulatory assault on private funds is underway, with no less than 10 new or amended SEC rules having a dramatic impact on the industry. FrontLine Compliance Founder and President Amy Lynch was recently interviewed by Hedge Fund Alert for their “Regulatory Roundup” series that digs into the SEC rules while detailing reactions from the industry. The sole compliance consultant featured in the story, Ms. Lynch, sees an SEC intent on delivering many of their rules this year since some have been sitting as proposals since 2022. Others that have been already adopted, such as the new Private Fund Rules and changes to Form PF reporting, have compliance dates beginning in September 2024. Industry groups are bringing lawsuits to stem the tide of regulations, and Ms. Lynch adds that there is a race to the finish line. On one side, the litigation is seeking to overturn or stall regulations, and on the other side the SEC’s pursuit is to enact the regulations under the current administration. In discussing the arguments for both sides, she states that it makes sense for the SEC to seek greater transparency on trading activity to better monitor the markets for potential disruptions. However, Ms. Lynch also understands why the private fund industry is pushing back with the view that its trading and investing strategies, including how they determine when to short securities, should be closely held and out of the public eye to offer advantageous money management for their investors.

See Hedge Fund Alert (subscription required), “Regulatory Roundup”

Also see our ComplianceAlert, “SEC’s New Private Fund Rules Alter Landscape (Video)”