Survey Finds Compliance Programs and Cybersecurity Preparedness of Alternative Asset Managers to be Inadequate Relative to Traditional Asset Managers and Broker-Dealers

Cipperman Compliance Services (CCS) recently issued the results of its 2017 C‑Suite Survey. CCS asked financial services executives seven questions about the role of their firms’ chief compliance officers; attitudes toward compliance; and the sophistication of their firms’ compliance programs and cybersecurity preparedness. Based upon the responses of executives from alternative asset managers, the survey suggests that their compliance programs are less likely to withstand SEC scrutiny and their firms are less prepared on cybersecurity matters, relative to traditional asset manager and broker-dealer participants. This article analyzes CCS’ findings and provides commentary on those findings from CCS’ president, Rob Prucnal. For coverage of CCS’ 2016 survey, see “Survey Reveals Compliance Weaknesses of Hedge Fund Managers Relative to Other Financial Services Firms, Including CCO Qualifications and Frequency of Annual Compliance Reviews” (Sep. 15, 2016). For additional compliance insights from CCS founder Todd Cipperman, see “Pay to Play, Revenue Sharing and Wrap Fees Remain on the SEC’s Radar” (Apr. 20, 2017); and our three-part series on the simultaneous management of hedge funds and alternative mutual funds following the same strategy: “Investment Allocation Conflicts” (Apr. 2, 2015); “Operational Conflicts” (Apr. 9, 2015); and “How to Mitigate Conflicts” (Apr. 16, 2015).

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