Softening of regulation still puts compliance on notice (FundFire)

While the SEC’s stance of reducing regulation and rulemaking may give the impression that there is less for compliance to do, the opposite is more the case. Hedge funds and other private funds seem to be reaping the benefits of rescinded rules and delayed compliance dates. However, even rule changes that are considered positive for the industry will require reshaping and adjustments to compliance functions, states Amy Lynch, FrontLine’s Founder and President. In the lead comments, Ms. Lynch points out how the potential forthcoming updates to the definition of an accredited investor will require money managers to change the way they market products – and that means more work for compliance. By making funds more accessible to a broader audience, this increases the burden overall on a firm and its compliance responsibilities, she adds. While the changing regulatory landscape has opened more doors for hedge funds and other private market participants to push their lofty goals ahead, regulators globally have raised concerns about the expanding use of leverage and its potential impact on financial stability. With this in mind, the role of compliance will continue to have an important place identifying and reducing risks. See FundFire (subscription required), “Winners Circle: Regulatory Reset Shows Hedge Fund Market’s Clout”