Regulatory Alerts2018-07-20
SEC Reforms for the Fund Management Industry
The Securities and Exchange Commission has issued new regulatory guidelines to address liquidity shortfalls and concentrated risk in the fund management sector following a surge in investor complaints. The reforms impose strict caps on investments with related parties and single institutions, mandate board subcommittee approval for related-party transactions, and prohibit fund managers from issuing fixed deposits to the public. Firms must submit baseline compliance data by June 2018, unwind prohibited fixed-term contracts by December 2018, and adhere to enhanced governance, client segmentation, and disclosure standards for collective investment schemes.
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