Last Year In Review And What Lies Ahead
Last Year in Review…
In 2022, Chenery Compliance Group (CCG) continued to have strong success and we are proud that our institutional-quality Chief Compliance Officer solutions have led to an expanding base of proactive client and center-of-influence advocates.
Despite the ongoing challenges of market conditions, an ever-changing regulatory landscape, and robust SEC rulemaking, our firm achieved notable milestones, including:
Successfully completed numerous detailed SEC Exams, with favorable outcomes for our clients; while gaining actionable insight into SEC interest areas.
Continued our registered fund practice expansion with an important and complex series trust engagement win that encompasses 3 trusts, 12 IAs and 37 funds.
Leveraged our CCO-led Regulatory Update Committee to provide forward-looking Marketing Rule and Derivatives Risk Management Rule counsel, while proactively implementing related policy and procedure updates.
Expanded our Team with 7 seasoned consultants, each with >10 years of regulatory and operational experience, including CCOs, Compliance Leads/Associates and a Regulatory Administrator.
What Lies Ahead...
As we look ahead into 2023, we are informed by the SEC’s rulemaking and exam priorities. Our CCO solutions are timely and forward looking, designed to help protect our clients from today and tomorrow’s regulatory risk. Focusing on anticipated rulemaking and exam priorities, we offer the following insight:
We expect continued regulatory focus on the new Marketing Rule and will ensure our clients’ policies and procedures are reasonably designed to comply with the new rule. We are prepared to analyze and incorporate anticipated SEC clarifications through related exam deficiency letters and enforcement actions.
Private funds will remain a top priority of the SEC, as we await new rules based on previously released proposals. The SEC’s ongoing efforts are aimed at promoting increased transparency in the private fund space. The proposed rules include, but are not limited to, requiring registered private fund advisers to provide investors with quarterly statements that detail information regarding fund fees, expenses, and performance.
The SEC proposed Cybersecurity Rule that requires investment advisers and private funds to adopt written policies and procedures designed to address their cybersecurity risks. A few highlights of the proposed rule include: an annual risk assessment; the adoption and implementation of specific written policies and procedures; disclosure of significant cybersecurity risks and incident reporting; and recordkeeping requirements.
Another proposed rule worthy of focus is the new Outsourcing Rule, which prohibits registered investment advisers from outsourcing certain services and functions without conducting due diligence and monitoring of the service providers. The new Outsourcing Rule comes with heavy criticism, likely due to the lack of a reasonable cost-benefit analysis or clear definition of covered service providers. While we agree with the SEC’s position that there is a need for due diligence and oversight for certain outsourced arrangements, we believe this fiduciary responsibility already exists when advisers engage third-party service providers.
Our mission to help protect our clients from regulatory risk is unwavering. It’s why we exist. It is imbedded in all we do. And it enables our clients to focus on investing and business building.
Wishing our clients and friends a healthy, happy, and prosperous 2023!
Thank you for your trust and confidence.
Chenery Compliance Group