SEC allocates more resources for private fund exams (Financial Times)

The SEC has noticed the rapid growth of private fund managers and now it’s setting its sights on expansive examinations and oversight. The regulator’s recently released exam priorities, coupled with SEC Chairman Gary Gensler’s frequent public announcements, have warned of new risks for investors and markets due to the acceleration of private fund offerings during the past several years. Amy Lynch, FrontLine’s Founder and President, was interviewed by the Financial Times to discuss what could be expected from the SEC in the coming months. Ms. Lynch expects that a surge in private fund exams would add support for Gensler’s rule reforms and proposals focused on these firms. New SEC regulations requiring more transparency and disclosures would in turn benefit the exams by potentially revealing compliance failures. Ms. Lynch also comments that the SEC currently lacks the resources to keep up with the growth of the private funds industry so there’s an urgency to adapt its exam approach while it seeks to add more examination staff. See Financial Times (subscription required), “US regulators to boost enforcement against private fund failings”