A two-part series in Hedge Fund Legal & Compliance Digest, titled “Best Practices for Hedge Fund Managers Preparing for an SEC Examination” explains that as the SEC’s Office of Compliance Inspections and Examination (OCIE) has ramped up examinations of hedge funds, managers must be as prepared as possible, and at all times, for inspections. The series contains insights from private investment funds partner Jason Brown (Boston).
“Firms should have a compliance manual that is tailored to their businesses and that people follow,” states Mr. Brown in the piece. “There should be adequate resources devoted to compliance to get the job done. Compliance should be integrated into the activities of the firm. There needs to be a ‘tone at the top,’ and buy-in by management, and evidence that they participate in the compliance program. Having these things will be the first step to making sure your exam goes smoothly.”
The articles review the types of examinations the SEC conducts on hedge fund managers, including events that trigger exams and pre-exam preparations firms should undertake, and explores pre-exam preparations and details best practices for getting through the actual on-site visit.
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