Asset Management Partner Paulita Pike Commends the SEC’s Response to the COVID-19 Crisis and Supportive Regulatory Actions in Fund Board Views
A March 31 article published by Fund Board Views titled “SEC issues interfund lending relief” reports on the SEC’s interfund lending relief plan in response to the COVID-19 pandemic. Insights from asset management partner Paulita Pike are included in the piece. "What [the SEC] did by issuing this [relief] is provide yet another tool in the toolbox to asset managers," said Paulita.
While there is likely to be a need for liquidity among some funds, interfund lending may be a last resort after other tools are exhausted and lines of credit are tapped out, Paulita explained, noting that if the same board oversees both the lending fund and the borrowing fund, that would complicate such a transaction. "The potential for conflicts is greater with this tool than with others," she said. "For some, this is not necessarily the first thing you go to."
It made sense for the SEC to grant the relief because it expands the options available to funds, Paulita outlines. Commending the SEC’s response to the crisis, Paulita stated "During this time of crisis, the Division of Investment Management has been an incredible regulator and partner to the industry in an unprecedented way," she said. "There's no question they have opened up communication lines with industry trade groups [and] fund groups and added flexibility that adds stability to the industry. I don't recall a time of collaboration like this."