Fund managers have adopted stringent controls around their investment team members speaking with industry experts and political consultants, but when it comes to speaking directly with officers and executives of publicly traded companies – frequently referred to as “corporate access” – the consensus around best practices has been slower to develop. This second article in our three-part series discusses how advisers can design policies to minimize the risks associated with these meetings, as well as six front-end controls that advisers should consider adopting. The first article
provided an overview of the context in which meetings between fund managers and issuers arise; the goals of corporate access; the ways brokers are compensated for facilitating these meetings; and two key legal risks presented by this practice. The third article will analyze several testing mechanisms that managers can use to ensure compliance with their policies governing corporate access, as well as the SEC’s expectations regarding an adviser’s oversight, controls and procedures related to communications
with executives at publicly traded companies. See our two-part series on mitigating insider trading risks: “Relevant Laws and Regulations; Internal Controls; Restricted Lists; Confidentiality Agreements; Personal Trading; Testing; and Training
” (Sep. 27, 2018); and “Expert Networks, Political Intelligence, Meetings With Management, Data Rooms, Information Barriers and Office Sharing
” (Oct. 11, 2018).