Post image for Legislation Impacting Hedge Funds Starts Moving through the House

Legislation Impacting Hedge Funds Starts Moving through the House

by Ron Diel on November 18, 2009

At the end of October, the House Financial Services Committee moved forward on two of the topics previously tracked by this blog, and introduced a third into the discussion.

On the 27th, the Committee approved H.R. 3818, the Private Fund Investment Advisers Registration Act, which requires advisors to private pools of capital to register with the SEC, and subjects them to new recordkeeping and disclosure requirements.   The bill, a derivative of the proposed legislation submitted by the administration in July and discussed in a posting at that time, was introduced by Representative Paul Kanjorski on October 15. The markup draft does incorporate several material changes from the earlier proposal.



The next day the Committee approved H.R. 3890, the Accountability and Transparency in Rating Agencies Act.   This bill was also introduced by representative Kanjorski based on the administration’s proposed Improvements to Regulation the of Credit Rating Agencies that was discussed in this earlier post.

Both of these bills received strong bipartisan support in the Committee. Going forward, their progress can be tracked on the widgets to the left.

On the 27th, the Committee also began considering the Financial Stability Improvement Act, their version of an administration proposal to require financial firms, including hedge funds, with more than $10 billion in assets to cover the cost if the government takes over financial institutions whose failure could pose a systemic risk.   This bill is a compromise worked out between the Treasury Department and Committee Chairman Barney Frank.

All three of these developments and their potential impacts on the hedge fund industry will be discussed in greater detail in upcoming posts in our InDepth Section.

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Director Robert Khuzami Announces Changes at The SEC Enforcement Division

by Ron Diel on August 15, 2009

The future direction of SEC enforcement was described in broad terms by Robert Khuzami, the new Director of the SEC’s Division of Enforcement, in a speech to the New York City Bar earlier this month.  Khuzami characterized his short tenure at the commission as a time of rapid change, driven in large part by the repercussions and criticisms resulting from the Madoff scandal.  The speech laid out new guiding principles for the Division, including a focus on strategic cases involving major breaches or the potential to deter violations, swift SEC action after a violation, allocation of Division resources to maximize their impact, and increased litigation success based on building stronger cases.

Khuzami announced several specific initiatives related to those principles.

Structural Changes

The proposed changes are responsive to the criticisms raised in the GAO Report on the Enforcement Division, which was delivered this past March and reviewed in a Senate hearing in May.  During the hearing, Richard Hillman, the responsible GAO manager, discussed a number of shortfalls in the Division and a series of recommended changes, which were agreed to by Director Khuzami (who also testified) and are now closely paralleled in the changes he is adopting for the Division.  In particular, the Division will create five specialized units, each having the expertise to enforce a particularly complex area of securities law, with the goal of becoming more efficient and effective in selecting the tips to be investigated and in following up quickly where violations are suspected.  Of particular interest to the hedge fund community, an Asset Management Unit will focus on hedge funds, investment advisors, investment companies, and private equity funds.  Disclosure, valuation, portfolio performance, due diligence and diversification, transactions with affiliates, misappropriation, and conflicts of interest were identified as expected areas of concern.

An Office of Market Intelligence will be created to support the specialized units by collecting, analyzing, risk-weighting, triaging, referring and monitoring progress on tips, complaints and referrals.  The unit will apply internally-developed risk criteria and priorities, possibly reflecting a movement toward a risk-based examination model, as was championed by SEC Chairman Mary Schapiro when she led the NASD/FINRA.

Branch chiefs will be redeployed to conduct investigations in order to increase investigative resources and eliminate duplicative efforts, unnecessary internal reviews and delays in decision-making.

Given the resources being added to investigations and the increase in the Division’s willingness to go to trial, plans call for adding staff to the Trial Unit.  The Division also plans to hire a Chief Operating Officer to manage IT, internal projects, and workflow improvements, along with added support and technical personnel to free up the front-line lawyers who are now responsible and provide them with additional tools for doing their jobs.

Realigned Decision-Making

[Click to get the rest of the story...]

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FSA Adopts Rules to Address Compensation Policies that Promote Risky Behaviors

by Ron Diel on August 15, 2009

Earlier this week, the FSA provided a solid example of rules that address risks created by poorly structured remuneration programs. The FSA rules demonstrate an alternative to pending US legislation and highlight the importance of acting quickly to control 2010 compensation. Under the rules, firms are required to adopt remuneration policies reflecting an included list of principles, have them approved by board compensation committees, file them with the FSA by the end of October, and put them into practice by January 1st. The rules also provide guidance on addressing pre-existing contracts like the questions being raised concerning Andrew Hall’s employment agreement with Citibank.

The FSA focused on risks from badly structured compensation agreements, specifically not attempting to address perceived compensation excesses (which are in any case less prevalent than in the US):

The aim of the Remuneration Code is to ensure that firms have risk focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk.

The code specifies that compensation programs should be based on risk-adjusted long-term profits not revenues, reflect adherence to risk and compliance policies, individual, division, business unit, and firm performance, and Include a base component sufficient to allow the firm to choose not to pay a bonus in a given year. It also calls for limiting guaranteed bonuses to the first year of employment, and spreading payment of at least two-thirds of any senior employee bonuses over a three-year period.

Firms with inconsistent contract obligations are called upon to amend such obligations within set time frames.

Our detailed analysis of the FSA rules and a comparison with USA proposals are available here.

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SEC and FSA Consider Regulations Related to High-Frequency Trading

by Ron Diel on August 4, 2009

This week both the SEC and the FSA disclosed steps that could lead to restricting certain practices related to high-frequency trading. According to Bloomberg News, the FSA is meeting with market participants including hedge funds, banks, investment banks, and investment managers to assess the overall impact of high-speed trading in the UK.  Yesterday, Senator Schumer announced that Mary Schapiro at the SEC had promised to attempt to enact a U.S. ban on flash orders, one type of high-speed trading in which major firms have a fraction of a second to react while orders are passing through “dark pools” prior to being routed to open public markets.  That promise builds upon a speech in June, in which she pointed to a potential “danger that significant private markets may develop that exclude public investors” when announcing that the Commission was considering restrictions on high-speed trading.

The timing of the SEC investigation is in part a response to a letter to Chairman Schapiro from Senator Schumer condemning the practice as unfair, a part of which is included below.

Flash orders allow certain members of these exchanges to obtain access to order flow information before that information is made available to the public, allowing those members to use rapid trading programs to trade ahead of those orders and profit from advanced knowledge of buying and selling activity. While pre-routing programs can benefit markets by providing additional liquidity, this kind of unfair access seriously compromises the integrity of our markets and creates a two-tiered system where a privileged group of insiders receives preferential treatment, depriving others of a fair price for their transactions.

Besides any direct impact of potential regulations, the tenor of the discussion contains a significant message. The statements to date emphasize the priority that will be given to achieving fairness in the markets, including the relative weighting given to individual-level fairness over market efficiency in Senator Schumer’s letter.  A similar view was expressed in an opinion by economist Paul Krugman in Monday’s New York Times, in which he questions how “traders who place their orders one-thirtieth of a second faster than anyone else do anything to improve” the markets.

Although articles, including Paul Krugman’s op-ed piece, have focused on Goldman Sachs, NPR reported that the firm has sent a letter to its clients in which it denies engaging in-flash trading or any other programs where information from client orders is used before trades are completed, and revealed that all forms of high-speed trading together were responsible for only about 1% of 2009 revenues.

As reflected in that letter, it is important to bear in mind there are multiple types of high-speed trading; besides the specific mechanism described above for flash-trading, other programs simply rely on reacting to pricing more quickly to take advantage of market conditions.  To put this into context, the Tabb Group published a study last year entitled “The Value of a Millisecond” (link to the catalog entry, not the $3,000 study) in which they concluded that an electronic brokerage firm would lose 10% of its revenues for each 10 millisecond increase in transaction latency.

We believe that one of the key longer-term lessons in all of this comes from the Goldman quote in the NPR article stating that “the most significant challenge ahead is for the regulatory framework to keep current with the rapid pace of innovation in the marketplace.”  It will be important for regulators to keep this in mind as they craft regulations to deal with the perceived issues arising from today’s technology.

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Regulatory Conflicts of Interest: When the Government Owns a Stake

by Ron Diel on August 4, 2009

The Washington Post reported today that on at least two occasions the SEC has been forced to grapple with conflicts between their enforcement role and the role of the U.S. government as a significant investor in (Regions Financial) or influencer of (Bank of America) a large financial services firm.  In both cases, the SEC chose to pursue an enforcement action, but additional conflicts are likely to surface in the future since the government has acquired interests in a number of banks and other financial institutions through the TARP program.   Nevertheless, the Post quotes Robert Khuzami, who directs the SEC’s Enforcement Division, as saying that he expects few actual conflicts to arise.   And, for the larger, systemically-important institutions such conflicts may not alter the balancing act underlying their decision to proceed with enforcement: the article points to an example last year where the regulator felt the need to pause to consider a similar concern concerning potential damage to the system if a settlement pushed one or more of the large institutions involved over the edge.

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Who’s Regulating the Regulators? See Picture Below, then Keep Reading

by Ron Diel on August 3, 2009

The Wall Street Journal reported today, and Reuters confirmed, that Secretary Geither called in the heads of the FRB, the SEC, the CFTC and the FDIC (among others) on Friday to lay down the law in no uncertain terms on their mandated public support for the Obama Administration’s reform plans and to demand they stop the “sniping” that has been going in turf wars among the agencies.

In the video clip above (which will include a brief commercial from the Journal), the WSJ’s reporter Deborah Solomon cites growing unease at senior levels with the slow pace in Congress, the pushback from the industry as well as the divisions among the ranks of regulators as sources of the high level of frustration that led to the reportedly tough, expletive-filled meeting atmosphere.

Despite the strong language in the meeting last Friday, at least some of the regulators remain quite independent as far as expressing their views.   In particular, the heads of the OCC and the OTS, which would be consolidated under the Administration’s current proposal, voiced their disagreement. In his testimony before the Senate Banking Committee on August 4th (shown in the clip at right), John Dugan, the Comptroller of the Currency, voices support for many elements of the Administration’s proposals but disagrees forcefully with some key elements, including proposals to give the FRB authority to override his agency’s standards and enforcement in some circumstances, and to consolidate enforcement of consumer provisions in the proposed CFPA, thereby divorcing consumer and prudential regulation.  John Bowman, acting head of the OTS, disagreed with the premises for consolidating his organization noting that the actual distribution of failures did not support the regulator-shopping accusations on which the proposal was based.

In response to a question from Senator Shelby citing the WSJ article, each regulator specifically stated that they all were giving their own, independent views, as is required by the terms of their charters.

Nevertheless, in an interview with the Wall Street Journal on August 13th, Secretary Geithner remained confident that the Administrations program was on track.  As the Journal summarized the situation:

The administration’s plan has lost some momentum since it was unveiled in June, with lawmakers postponing votes on key portions of the proposal, the industry criticizing much of it and regulators battling over turf. But Mr. Geithner said the effort is “doing fine” and predicted the administration will get most of what it is seeking when Congress returns in September.

One certainly would expect the meetings at Treasury to remain interesting at least until the disposition of the proposed legislation becomes clearer.

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SEC’s Investor Advisory Committee Meets

by Ron Diel on August 3, 2009

On July 27th, the Investor Advisory Committee conducted its kickoff meeting led by its Chairman, Luis Aguilar (an SEC Commissioner).  The Committee, which was announced by the SEC  in June, is chartered “to provide the Commission with the views of a broad spectrum of investors on their priorities,” which the SEC will consider when assessing potential regulatory reforms.

The kickoff deck from the meeting, a press release, and a video archive link are available on the committee’s website. Among the topics the deck lists as being of interest to the Committee are the following:

  • Fiduciary duties
  • Disclosure
  • Investor-director communications
  • Treatment of credit based instruments (like derivatives)
  • Arbitration
  • Valuation
  • Majority voting
  • Proxy voting
  • Corporate governance

Although the topics actually discussed last week were more relevant to retail investors, the topics listed and Committee makeup indicate that future discussions are likely to be of interest to hedge funds.

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Geithner on Financial Regulatory Restructuring

by Ron Diel on August 3, 2009

In his opening statement on July 24th before the House Committee on Financial Services, Secretary Geithner discussed the Administration objectives and priorities underlying the Financial Regulatory Agency Restructuring plan.  In the oral statement, a clip of which is shown at left, the Secretary emphasized the need for the two new agencies being proposed in the plan: the Consumer Financial Protection Agency and the Financial Services Oversight Council. The CFPA was designed to better target abuses by imposing uniform standards across all institutions and by having authority over sectors the Administration sees as having been under/unregulated.  The FS Oversight Council is to promote financial stability by addressing risk taking practices, including the use of leverage seen as excessive, that are thought to have contributed to the current crisis by (1) addressing a broader range of institutions, (2) working toward international cooperation and enforcement, and (3) having stability as its primary goal, which is not true of other regulators according to the Secretary’s statement.

The full text of the statement, which includes other topics, is available here.

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Regulating the Rating Agencies

by Ron Diel on August 2, 2009

On July 21st Treasury proposed legislation to strengthen regulatory oversight of national credit rating agencies by amending Section 15E of the 34 Act to require agencies to (1) register with the SEC as “nationally recognized statistical rating organizations” (NRSROs), (2) create internal compliance organizations under a CCO, (3) implement written policies, procedures and codes of ethics, (4) include greatly increased risk and reliability related disclosures in their ratings reports, and (5) file annual regulatory reports, including compliance certifications.  Among other topics, the mandated policies and procedures must address conflicts of interest in the rating process.

The proposal directs the SEC to create an office dedicated to overseeing NRSROs and to adopt rules to change industry business pricing and business practices. This would amend the Credit Rating Agency Reform Act of 2006 and its associated regulations, which provided for optional registration.

Our detailed analysis of the proposal is available here.

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Hedge Funds Take Advantage of Bank Pullback

by Ron Diel on August 1, 2009

A recent WSJ article reported that hedge funds are experiencing their best performance in a decade due, at least in part, to declining competition for market opportunities from proprietary trading by the major banks which have become more conservative.  This provides an explanation for a Morningstar report on July 21st that during the second quarter their index of 1,000 hedge funds had posted its best quarterly return at 9.25% since the inception of the index in 2003.  The prior best was just 7.40% in 2003.

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House OKs Compensation Controls Legislation

by Ron Diel on August 1, 2009

Yesterday the House voted to amend the 34 Act to give regulators the power to veto incentive-based pay packages at institutions with over $1B in assets when they find that the packages would induce excessive risk-taking.  The bill also mandates that shareholders of a registered company be given the opportunity to cast advisory votes on the company’s compensation practices.

In most cases, reform efforts have focused on giving more power over executive compensation to shareholders, but this legislation goes further, imposing limits overseen by regulators.  In an editorial in the Financial Times, Professor Bebchuk of Harvard Law School supports the proposal on the grounds that these shareholders benefit from explicit and implicit government guarantees, creating a moral hazard that they will be comfortable with more risk than is justified economically and therefore approve incentives that reward excessive risk taing.

A widget from OpenCongress that will track the progress of this bill is included at left.  Added information about the bill and links to sign up for alerts and other services for this or other bills are available on their site.

Following are the links to:

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Proposed Private Fund Legistation

by Ron Diel on July 16, 2009

On July 15 the Administration released proposed legislation that would require most hedge fund advisers and other managers of pools of private equity to register with the SEC for purposes of imposing new record keeping and reporting requirements tailored to the private funds.  Confidentiality of the filings is addressed in the proposal, but requirements for sharing with other agencies are included. The proposal also clarifies and extends the power of the SEC to interpret the terms of the Advisers Act, including the term ‘client’, which would effectively overrule Goldstein vs. S.E.C. and thereby give the Commission the power to fully eliminate the Advisers Act relied on by most unregistered hedge funds, as it tried to do in 2004.

Our detailed analysis of the proposal is available here.

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The NYSE

Welcome: (please excuse the construction)

by Ron Diel on June 30, 2009

Welcome, but I’m afraid you’ve arrived while construction is still underway.

I’m in the process of creating this Hedge Fund Regulation blog as a platform for tracking, discussing and helping practitioners to cope with the increased level of regulation that we all know will be imposed shortly upon hedge fund advisers (or possibly upon the funds themselves according to the comments of some regulators – an even greater challenge given the demands of the 40 Act).  Right now I’m dealing with the twin challenges of first mastering the mechanics of installing and configuring the required software and then creating the actual content of this blog.  While it may seem that the order of these tasks is reversed, in practice it certainly seems like the former is taking precedence.

Luckily, between the excellent platforms provided by WordPress and Thesis, and the seemingly endless content being generated by developments in the current Administration, the Congress and the markets, I’m confident that these challenges can both be overcome and more and “meatier” postings will be added in the near future.

So I ask that you please stay tuned in as the work progresses!

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Regulatory Overview (and Index to postings on this Site)

Post image for Regulatory Overview (and Index to postings on this Site)

by Ron Diel on January 24, 2009

The primary authority governing U.S. hedge fund advisers is found in the Investment Advisers Act of 1940 (generally called the Advisers Act), but additional requirements can arise under the Securities Act of 1933 (33 Act), the Securities Exchange Act of 1934 (34 Act), and the Investment Company Act of 1940 (40 Act). Depending on the nature of their businesses, advisers also must be aware of the requirements of the Commodity Exchange Act, the Gramm-Leach-Bliely Act (GLBA), the Employee Retirement Security Act (ERISA), and applicable State laws. Beyond the statutory requirements, adviser conduct is governed by the corresponding regulations issued by the SEC and the CFTC and by industry self regulating organizations (SROs) like FINRA and the NFA. Additional guidance is provided by various industry and government-sponsored advisory groups like the President’s Working Group (Best Practices for the Hedge Fund Industry [pdf]), the Alternative Investment Management Association (Guides to Sound Practices), the Managed Funds Association (Sound Practices for Hedge Fund Management [pdf]), and the International Organization of Securities Commissioners (Hedge Funds Oversight [pdf]).

The chart below and the accompanying table present a general overview showing how the major categories of regulation map to the business processes of an investment manager:

Overview-Diagram

Each lettered flag in the diagram above corresponds to an area of regulation that is applicable to investment advisers in general, and hedge fund advisers in particular. The corresponding regulatory categories, with links to relevant postings in this blog, are listed below.

INDEX: Areas of Hedge Fund Regulation:

  1. Registrations
  2. Employee Conduct
  3. Public Communications / Solicitations
  4. Investor Relations (including AML)
  5. Investment Decision-Making
  6. Executing Fund Transactions
  7. Risk Management
  8. Investment Constraints
  9. Processing Fund Transactions
  10. Safekeeping Fund Assets
  11. Investor Communications
  12. Investor privacy and security
  13. Record Keeping
  14. Regulatory Reports and Filings
  15. Performance Measurement
  16. Firm Financial Management
  17. Compliance Environment
  18. Compliance Supervision
  19. Proprietary Firm Trading
  20. Valuation
  21. Market Research
  22. Business Continuity Planning (not shown above)
  23. Other Applicable Bodies of Law (not shown above)

Other Topics Covered in Postings (not shown above):

Advisers managing registered investment companies also must satisfy the requirements of the 40 Act in respect to those funds.

Besides the above bodies of regulation which apply specifically to investment management, each hedge fund adviser needs to comply with legal constraints applicable to businesses in general, such as antitrust law, Sarbanes Oxley, employment and labor laws, and the general bodies of law governing financial and other crimes.

This overview is meant to serve only as an introduction to the breadth of requirements facing an adviser. Each firm will need to consult its legal counsel to adapt and interpret the business categories and flows shown above, as well as determining whether other constraints need to be considered, to address the content, volumes and nature of the adviser’s specific business activities.

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About the Hedge Fund Regulation Blog

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by Ron Diel on January 24, 2009

We’ve created the Hedge Fund Regulation Blog to collect useful information about the ongoing flow of regulatory developments that impact the way hedge funds operate. We will strive to reach across subject matter boundaries (legal, compliance, operations, financial, and technology) to gather relevant information that can be applied by practitioners. In some cases the information may call for immediate actions, in others it may be a factor to consider in longer term planning. We will also exercise editorial discretion to filter out the background noise from the flow of daily facts that do not rise to the level of generally useful information, so the wheat won’t be obscured by the chaff.

One of our strategies will be to identify, analyze and track major patterns of change in the overall climate of regulation. There already are multiple sources of information about day-to-day developments in this area, but there are far fewer that try to apply some perspective to identify and consider the longer term implications of those developments. We believe that sustainable advantage can be gained by those who do recognize and act on these patterns before their competitors.

Clearly the current push to reform financial services regulation, including the Administration’s plan for Financial Regulatory Reform, is an example of such a pattern. Most commentaries seem to address how this is likely to affect the status quo business models found in the industry. We believe that the mix of changes being proposed in legislation, when combined with changing attitudes toward enforcement, are likely to break parts of those models and lead to a more fundamental industry realignment.

We see another such pattern in the push by regulators, particularly the SEC, to require institutions to strengthen and formalize their internal compliance functions, effectively outsourcing some aspects of regulation through a process characterized as Institution-Based Regulation in an article last year by John Walsh, Chief Counsel at OCIE. The resulting push for demonstrable compliance, reinforced by similar demands from client due diligence, call for rethinking how the compliance function is performed to make it a more effective operational process, not simply to add more staff to the existing advisory-team model. Another pattern concerns efforts to reinvigorate the roles played by (or at least assigned to) independent monitors of the industry, the gatekeepers like audit firms and rating agencies, in keeping firms on track.

Of course these patterns overlap, as will be reflected in out articles.

Another strategy is to be multidisciplinary. The existing sources of deeper analysis typically come from firms that are deeply ensconced in one field of subject matter expertise (law and accounting firms being the best examples), which limits their ability to take into account interactions among multiple disciplines. Modern regulatory developments can grow out of technical developments (like high frequency trading), operational concerns (like processing OTC derivatives), or organizational developments (like incentive-based compensation), not merely from legal and regulatory changes. Our background gives us the broader perspective to assemble all of those pieces to see more of the big picture. Our perspective is shaped by our founder, who combines experience from working in the some of the leading firms in the fields of law (Sullivan & Cromwell), audit (Price Waterhouse), consulting (A.T. Kearney), financial services (Goldman Sachs), and technology (BearingPoint), as well as experience in advisory, management, technical, and oversight roles.

In addition to detailed analyses, we will be including shorter postings concerning developments that relate to the patterns we’re following. These notes will summarize the development and provide links, embedded features, and videos to let you gather more information if the subject is of value to you. We will also publish background articles on the history, structure, and regulation of the industry. While all of this information is available in scattered locations across the Web, we believe that we can add value for our readers by filtering, assembling, integrating and adding some analytical perspective to the information that’s out there.

As the reader base grows, we’d also like to add forums or wiki features to allow our readers to participate in the discussion and collaboratively work on building a useful base of information and documents. For the moment though, the ability to post comments on our articles will have to suffice.

In all cases, we will try to includes useful links back to original documents, analyses, articles, and entities that are relevant to our postings. We also are providing tools to sign up for RSS, email and Twitter notices of new postings so that you can stay up to speed with developments on this site.

Finally, we plan to vary our approach and content to suit the expressed needs of our readers. Please pass along your criticisms, suggestions and creative ideas on how we could better serve your needs.

About the Diel Group

The Hedge Fund Regulation site is produced by The Diel Group, Inc.

The Diel Group is a management consulting firm dedicated to serving the financial services industry. Founded in 2001, DGI focuses on delivering high-valued services to leading financial services firms. We’ve adopted a networked business model that reflects the growing consensus that consultants are best selected on the basis of the capabilities of the project team not the size, publicity-value or marketing budget of the proposing firm.

Our engagement teams are formed by combining our seasoned internal staff with resources drawn from a broad network of consulting, legal and technology firms, and experienced individual consultants. As a result, our teams’ expertise spans the key legal, operational and technical drivers impacting the industry, which enables them to solve the tough interdisciplinary problems our clients face in today’s business environment.

Our business model also permits us to staff projects based on the needs of our clients not on the size or content of our bench of unengaged staff; it also means that we don’t need to leverage a pyramid of inexperienced staff to carry our bags and support our firm’s economics.

To enable us to better serve the compliance needs of the hedge fund industry, the Diel Group developed ComplianceManager (TM) – an integrated GRC solution that provides automated support to help our clients satisfy the supervisory oversight requirements under the regulations associated with the Advisers Act §206(4)-7 and §203(e)(6), the 40 Act 38a-1, and/or FINRA §§3010, 3012, 3013. Our software can be used to track their legal requirements (including contractual requirements under PPMs, side letters, etc), their policies and controls, control tests and test results, exception management, issue management, and reviews. By linking records at each level, the system is able to automatically notify the “owner” of an entry whenever an event occurs for a related record (notify the attorney who “owns” a requirement when a control to enforce that requirement fails its test, or the reverse – to notify the control “owner” when the legal requirement changes).

A built-in messaging capability and dashboards track required reviews, approvals and control actions for each user, allowing participants to access and complete actions whenever a window of free time opens. The system retains a full audit trail of changes, approvals, reviews and messages which can be used to demonstrate compliance activities. In addition to meeting regulatory requirements, clients can use ComplianceManager to satisfy due diligence requests and to provide assurance to senior management that an appropriate framework of controls is in place and functioning correctly.

We’d be delighted to provide more information about ComplianceManager, our experience, our staff and our clients upon request. To make a request, you can reach us through the channels listed below.

Contacting The Diel Group

Comments and suggestions concerning this Blog can be sent to:

HedgeFundRegs: support@hedgefundregs.com

The publisher, The Diel Group, can be reached as follows:

Our Web site: The Diel Group, Inc.

By e-Mail: rdiel@diel.com

Direct Dial: (212) 419-4300

GoogleVoice: (646) 657-8380

Address:

The Diel Group, Inc.

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New York, NY 10069

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