Nov. 4, 2021
Nov. 4, 2021
Electronic Communications: Useful Training Techniques and Policies and Procedures to Adopt (Part Two of Three)
Hedge fund managers are familiar with regulatory obligations to capture, preserve and monitor emails. The universe of written business communications, however, has exploded in the past few years, driven by demographics, advances in technology and digitalization catalysts such as the pandemic. From chat applications including WhatsApp and WeChat to social media platforms such as Twitter and Reddit, CCOs face a dizzying and ever-changing array of business communications that must comply with recordkeeping and supervisory requirements. In light of that, compliance practices developed in the age of email must be adapted to new forms of messaging. This second article in a three-part series reviews policies and procedures hedge fund managers should enact to curb harmful electronic communications practices by their employees, as well as how to train staff on those policies and procedures. The first article outlined the regulatory obligations around electronic business communications and described why and how the current use of messaging technologies developed. The third article will detail how CCOs can approach the capture, archiving and surveillance of electronic communications other than email, as well as the challenges of producing responses to document requests from regulatory bodies. See “Key Elements of Electronic Communications Policies and Procedures for Hedge Fund Managers” (Nov. 12, 2010).
Read full article …
When East Meets West: Ten Considerations for VC Managers Launching “Evergreen” Funds and Hedge Fund Managers Launching PE Funds
The Fourth Industrial Revolution – i.e., innovation in areas such as artificial intelligence, machine learning, quantum computing, robotics, the Internet of Things, genetic engineering and other technologies – has affected, and will continue to impact, people’s lives in ways that were once unimaginable. As that revolution reshapes the U.S. economy, the continent that once seemed to separate the “West Coast” world of venture capital (VC) and growth equity investing and the “East Coast” world of hedge fund investing has shrunk, resulting in the current landscape where managers from each coast are deviating from their traditional fund products to launch either counterpart products or those with hybrid characteristics. As that practice becomes more pervasive, it is valuable for fund managers to consider how the innate differences in the products necessitate certain practical modifications to managers’ operations, compliance practices, fund structuring and other efforts. In a guest article, Paul Weiss partners Udi Grofman and Lindsey L. Wiersma identify the prevailing trend within the private funds industry in which the East and West Coast worlds are melding. In light of that development, the article then delineates ten unique areas that require extra considerations by managers that are deviating from their traditional approaches to offer new types of fund products. See “Structural and Operational Considerations for Hybrid Funds” (Jan. 14, 2021); and “Hedge Fund Managers Turn to Hybrid Fund Structures to Reconcile Fund Liquidity Terms and the Duration of Assets” (Feb. 4, 2009).
Read full article …
Global Outlook for Regulatory Enforcement in 2021 Shows Rising Scrutiny in U.K., E.U., Singapore, Hong Kong and Elsewhere (Part One of Two)
It is all too easy and common to lose sight of the forest in favor of the trees, and that is no different when it comes to monitoring regulatory developments. Although most fund managers strive to stay attuned to issues in their local jurisdictions, many fail to simultaneously monitor trends in other jurisdictions. Given that regulators often seek to copy the gold-plated practices of other jurisdictions, that lack of awareness could potentially catch managers on their heels. To that end, Clifford Chance recently hosted a webinar on regulatory enforcement around the world in 2021. The program was moderated by Clifford Chance partner Dorian Drew and featured fellow attorneys Celeste Koeleveld, Donna Wacker, Kabir Singh, Antonio Golino, Ellen Lake and Benjamin Berringer. This first article in a two-part series evaluates the general regulatory trends in each panelist’s respective home jurisdiction. The second article will drill down on market manipulation; anti-money laundering; fees and expenses; conflicts of interest; and operational resiliency measures adopted in each jurisdiction. For commentary from other Clifford Chance partners, see our two-part series “Diversity and Inclusion in Asset Management”: Key Challenges and Impacts of 2020 Events (May 13, 2021); and Structural Barriers and Investor Impact (May 20, 2021).
Read full article …
Incident Response in the Financial Services Industry
Intense scrutiny from a number of regulators, which are increasingly cooperating with each other, makes incident response planning crucial for fund managers and others in the financial services industry. A panel at the recent Incident Response Forum Masterclass 2021 delved into the cybersecurity issues facing financial services firms, focusing on the regulatory environment, the evolving threat landscape, vendor risk management, cyber threat intelligence and effective response planning. Elizabeth P. Gray, partner at Willkie Farr & Gallagher, moderated the discussion, which featured Luke Dembosky, partner at Debevoise; Daron Hartvigsen, managing director at StoneTurn; and Ali L. Karshan, GC for cybersecurity at Citigroup. This article distills their insights. See “How Fund Managers Can Establish Effective Incident Response Plans” (Jul. 18, 2019).
Read full article …
Current Status of Brexit and Overcoming Cross‑Border Marketing Obstacles It Introduces (Part One of Two)
The U.K. has been preparing for Brexit since 2016, but negotiations were difficult and did not conclude until shortly before the transitional period ended on December 31, 2020. Now that Brexit has happened and the terms of the U.K.’s departure have been determined, the impact on U.K. commerce and industry is becoming clearer. In turn, fund managers operating in the two regions are now beginning to move forward with long-term solutions for the new landscape. The effect Brexit has had – and is likely to have – on financial services was addressed in a recent panel sponsored by ACA Group (ACA). The program was moderated by Martin Lovick, director of ACA, and featured Darren Fox, partner at Simmons & Simmons; Adam Jacobs‑Dean, managing director of the Alternative Investment Management Association (AIMA); and Robin Meister, former global head of U.S. regulatory affairs at BNP Paribas Asset Management. This first article in a two-part series summarizes the current U.K./E.U. relations and financial services arrangements; Brexit’s impact on cross-border marketing; and potential upcoming U.K. policy initiatives. The second article will analyze the potential regulatory divergence between the E.U. and the U.K. as to environmental, social and governance; capital markets; public markets trading; and other areas. For additional commentary from ACA, see our two-part series covering its compliance testing servey: “Compliance Programs Holding Up and Significant Growth in ESG Interest” (Oct. 14, 2021); and “New Marketing Rule Is a Hot Topic” (Oct. 21, 2021).
Read full article …
Most-Read Articles
-
Sep. 12, 2024
Crafting Effective Mobile Device Policies to Satisfy Regulatory Expectations -
Aug. 29, 2024
CrowdStrike Outage: A Test of Form PF Current Report Procedures -
Sep. 26, 2024
Compliance Corner Q4‑2024: Regulatory Filings and Other Considerations Hedge Fund Managers Should Note in the Coming Quarter -
Sep. 26, 2024
SEC Penalizes Adviser for Preferential Redemptions and Undisclosed Conflicts -
Aug. 29, 2024
SEC Penalizes Adviser for Failing to Preserve Off-Channel Communications