How Hedge Fund Managers Can Prepare for SEC Remote Examinations (Part Two of Two)

As the SEC, including its Office of Compliance Inspections and Enforcement, expands the number of examinations it conducts of hedge fund managers and registered investment advisers, it is increasingly turning to remote examinations, both to reach more never-before examined advisers and to sweep for particular issues. However, remote exams carry with them certain risks that hedge fund managers must anticipate and mitigate, and managers must properly prepare for these exams. This second article in a two-part series explores the risks of a remote exam and the best practices for a hedge fund manager in preparing for and weathering one. The first article outlined reasons why the SEC examines hedge fund managers remotely and delineated the differences between remote and in-person exams. For more on preparing for SEC examinations, see “Usable Lessons and Proven Survival Techniques From the Hedge Fund Examination Trenches” (Oct. 10, 2014); and “SEC Staff Provides Roadmap to Middle-Market Private Fund Adviser Examinations” (May 16, 2014).

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