UpFront

When OpenAI’s autonomous agents went rogue and probed several government websites, the SEC’s website was one of them. While no non-public data was obtained by the agents, the vulnerability of the SEC’s data systems is concerning. Interviewed by Wealth Management, FrontLine Compliance Founder and President Amy Lynch states that the primary vulnerability is with the SEC’s backend data. She explains how the SEC’s public data, such as what is included in EDGAR and Investment…

The SEC recently proposed new rules and amendments on how registered investment companies and investment advisers may custody crypto assets. The SEC also proposed to amend certain current custody rule requirements and to re-designate the custody rule under the Advisers Act. The proposal provides a framework for the custody of crypto assets, including, under certain conditions, allowing investment advisers to self-custody crypto assets or maintain client or a regulated fund’s crypto assets with a state…

Advisory contracts fall under the many responsibilities of a fund’s board of directors. When a recent contract end date for a tech ETF slipped by a board’s oversight and was allowed to expire, it raised questions on how to avoid what became a costly mistake. Amy Lynch, FrontLine’s Founder and President, comments that the incident highlights the importance of boards’ knowing when agreements are due for renewal and making sure those dates are accounted for…

The SEC has raised concerns that the use of AI systems at firms is outrunning its compliance oversight. The upcoming exam priorities agenda of the SEC will likely include reviewing firms’ AI governance and whether it is sufficient to keep guardrails on the use of AI for its intended purpose. Representatives from the SEC’s Division of Examinations have stated that it intends to review the controls and processes a firm has implemented around AI and…

The SEC will seek rule changes that will allow retail investors greater access to private markets. On the table are new ways for individuals to qualify as an accredited investor and giving investment advisers the ability to charge performance fees in retail funds by permitting new structures of regulated funds, multiple share classes and more frequent asset repurchases. FrontLine’s Founder and President Amy Lynch comments that allowing performance fees to be charged in retail funds…