ComplianceAlert

SEC reveals its examination strategy

The SEC recently released a Risk Alert (“the Alert”) from the Division of Examinations on how it goes about selecting firms for examination. This is a first of its kind Alert since traditionally the Staff has not released its examination strategy and registrant selection process. The Alert even includes a chart that shows the items on its initial document request letter to registered advisers. The goals of the Division of Examinations are to: Promote compliance…

Read More

SEC eyes certain marketing documents for its exams (ThinkAdvisor)

When the SEC comes knocking for a Marketing Rule exam, there will be a host of marketing-related materials and data that the regulator will be requesting. Amy Lynch, FrontLine’s Founder and President, is profiled in a recent ThinkAdvisor article where these items are detailed in length. She describes the various types of documents and information the SEC is most interested in seeing during an exam as they pertain to the Rule. In June, the SEC…

Read More

ComplianceAlert

SEC’s New Private Fund Rule Alters Landscape

The private fund industry has a new compliance hurdle to reach with the SEC’s newly adopted Private Funds Rule (“the Rule”). On August 23, 2023, the Commission voted 3-2, along party lines, to adopt new rules (a total of five) under Section 211(h) of the Advisers Act. The SEC determined that new rules were needed for the private fund industry in order to address: Lack of transparency in private funds Conflicts of interest Lack of…

Read More

Compliance expert Amy Lynch on the SEC’s exam road map (InvestmentNews)

A recent risk alert issued by the SEC offers details on its criteria for selecting investment advisers for an examination. FrontLine Compliance Founder and President Amy Lynch is exclusively quoted in the InvestmentNews story covering the alert. Ms. Lynch discusses how the SEC provides a roadmap for investment advisers by describing how it decides which firms to examine, the compliance areas it will focus on and the documents it will request. She comments that the…

Read More

Third-party opinion component adds complexity to new private fund rule (PitchBook)

The SEC’s new private fund rule requires managers to seek a third-party perspective when conducting GP-led secondary offerings. The new rule mandates obtaining either a fairness opinion or a valuation letter from an outside party to address any conflicts of interest and validate pricing in deals. The SEC added the valuation letter option to the rule, a more informal and familiar method in private market transactions, as opposed to fairness opinions that are more common…

Read More