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    Dec. 4, 2025

IOSCO Revises Liquidity Management Recommendations for Private Funds (Part One of Two)

On June 26, 2025, the International Organization of Securities Commissions (IOSCO) released a report, “Revised Recommendations for Liquidity Risk Management for Collective Investment Schemes” (Report), presenting revisions of its 2018 publication on the same subject. IOSCO also issued a separate guidance document (Guidance), which supplements the Report and provides practical suggestions to help fund managers make sense of and adopt the more technical revised recommendations. In the Report, IOSCO is candid about the fact that it expects securities regulators to promote the implementation of its revised recommendations aggressively. However, although both new publications address material issues facing fund managers, legal experts interviewed by the Hedge Fund Law Report expressed skepticism about whether IOSCO’s recommendations are in line with the realities of the private funds market and will be favorably received in the United States and elsewhere. This article, the first in a two-part series, summarizes IOSCO’s revised recommendations and considers whether the SEC is likely to endorse them. The second article will delve into specific aspects of IOSCO’s proposed liquidity management tools, as set forth in the Guidance, that would be highly problematic for fund managers to adopt. See “IOSCO Issues Seven Key Outsourcing Principles” (Dec. 16, 2021).

Benchmarking AI Uptake by Compliance Functions

ACA Group (ACA), in cooperation with the National Society of Compliance Professionals (NSCP), has released its second annual artificial intelligence (AI) benchmarking report (Report), which is based on a survey of nearly 250 firms and compliance professionals. ACA and the NSCP conducted the survey to cut through the hype about AI and explore how it is presently used and where it is expected to be used, explained Carlo di Florio, president of ACA and former head of the SEC Division of Examinations, in a webinar reviewing the findings. The Report covers firms’ ever-increasing adoption of AI, how firms are using AI, the key risks associated with AI and how firms are seeking to mitigate those risks. This article synthesizes the key takeaways from the webinar and the survey’s key findings. See “Benchmarking Fund Managers’ Adoption and Governance of Generative AI” (Nov. 6, 2025).

Managing Cybersecurity, Incident Response Planning and Vendor Risk

“Despite what you may be reading about, the SEC is still focused on cybersecurity, as are other regulators such as the DOJ and the various states,” said Thompson Hine partner Ernest E. Badway during a firm program on cybersecurity and compliance. Investment advisers and broker-dealers are facing increasing pressure to ensure they have appropriate cybersecurity defenses and incident response plans. Badway, along with Thompson Hine counsel Kimberly Pack and Frank Brennan, an associate director of forensics and incident response at PNG Cyber, LLC, discussed the current regulatory regime affecting investment advisers and broker-dealers; incident response planning; vendor risk management; and mitigation of cybersecurity risks. This article distills their insights. See “SEC 2025 Exam Priorities Stress Core Fiduciary Duties and Effective Compliance Programs” (Dec. 5, 2024).

CFTC Commissioner Romero’s Views on Assessing Enforcement Matters

In February 2025, the CFTC Division of Enforcement issued an Enforcement Advisory with guidance to CFTC enforcement staff on evaluating credit for self-reporting, cooperation and remediation when recommending penalties in enforcement matters. On May 21, 2025, then-CFTC Commissioner Christy Goldsmith Romero issued a statement discussing her own process for evaluating cases and cooperation credit and calling on the CFTC to provide more transparency and detail in its public documents regarding its decisions on charging both monetary and nonmonetary sanctions in enforcement matters. Such additional transparency would make incentives for self-reporting, remediation and cooperation much clearer, she argued. This article parses Romero’s statement, which raises legitimate issues the current Commission should still consider notwithstanding her departure. See “CFTC Advisory on Self-Reporting, Cooperation and Remediation Overhauls Years of Guidance” (Mar. 27, 2025).

FCA Settles With U.K. Affiliate of U.S. Manager Over Undisclosed Conflicts

In February 2021, following a settled enforcement proceeding by the SEC against BlueCrest Capital Management Limited (BlueCrest), the U.K. Financial Conduct Authority (FCA) fined BlueCrest’s FCA-supervised U.K. affiliate, BlueCrest Capital Management (UK) LLP (BCMUK), £40,806,700 – more than $55 million at the time. BCMUK allegedly failed to manage or adequately disclose conflicts of interest associated with its side-by-side management of an internal fund open only to select BCMUK personnel (Internal Fund) and another fund open to professional investors (External Fund). BCMUK had transferred portfolio managers from the External Fund to the Internal Fund, replacing them in part with an automated trading system but allegedly failed to manage properly the associated conflicts of interest. After an appeal, the FCA and BCMUK settled the matter, with BCMUK agreeing to return approximately $101 million to affected investors and accepting a censure – but no fine – by the FCA. This article discusses the settlement, with commentary from Matt Hancock, partner at Greenberg Traurig, LLP. See “FCA Fines U.K. Affiliate of U.S. Manager That Replaced Successful Traders With Algorithms” (Feb. 17, 2022). For more on the SEC proceeding, see “Manager Learns $170M Lesson: Replacing Successful Traders With Algorithms May Result in Significant Penalties Unless Properly Disclosed” (Jan. 28, 2021).

Former SEC Examiner Joins Seward & Kissel in D.C.

Erin Galipeau has joined Seward & Kissel as special counsel in its investment management group in Washington, D.C. Galipeau comes to the firm with nearly two decades of experience at the SEC, where she served in the roles of Examination Manager and Senior Counsel and conducted investment adviser and investment company examinations. For insights from Seward & Kissel, see “New Equity Fund Managers Offered Lower Fees and Better Liquidity Terms in 2024, Study Finds” (Oct. 9, 2025); “Established Manager Report Benchmarks New Funds’ Strategies, Fees and Redemption Provisions” (Sep. 25, 2025); and “What to Expect on SEC Examinations Under the New Administration” (Jul. 17, 2025).

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Women to Watch: Contributions, Achievements and Observations of Outstanding Female Professionals

To mark International Women’s Day, women editors and reporters at ION Analytics interviewed outstanding women in the industries and jurisdictions we cover. In this part, Law Report Group editors Jill Abitbol, Robin L. Barton and Megan Zwiebel profile notable women in data privacy, cybersecurity, private funds and anti-corruption law, including Anne-Gabrielle Haie, Jessica Lee, Micaela McMurrough, Laura Perkins, Amanda Raad, Madelyn Calabrese, Ranah Esmaili and Genna Garver. Enjoy reading their inspiring remarks here.