The SEC has proposed new oversight requirements for investment advisors that outsource key functions such as portfolio accounting, investment management and cybersecurity. The proposal calls for a “minimum and consistent” framework for investment advisors to conduct due diligence and monitor service providers.
In a FundFire article, litigation & enforcement partner Amy Jane Longo discussed the proposed rule and what it could mean for service providers. “The supervision of service providers has been a stated priority of the SEC’s Examination Division for the past several years and is a regular part of SEC exams.”
“Issues such as potential conflicts of interest arising from the use of service providers, or the failure to oversee a service provider, have long been on the SEC’s radar under existing law,” she said. “The proposed new rule would prescribe more specific requirements around these areas but may also introduce uncertainty where it purports to impose new standards that are open to interpretation.”
Stay Up To Date with Ropes & Gray
Ropes & Gray attorneys provide timely analysis on legal developments, court decisions and changes in legislation and regulations.
Stay in the loop with all things Ropes & Gray, and find out more about our people, culture, initiatives and everything that’s happening.
We regularly notify our clients and contacts of significant legal developments, news, webinars and teleconferences that affect their industries.