One-Size-Fits-All Compliance Comes up Short
The hedge fund advisers now facing Securities and Exchange Commission oversight for the first time are about to learn a lesson that is obvious to more-seasoned regulated entities: Compliance is not going to be a cookie-cutter process, especially in a private-investments segment that is unfamiliar with regulation and does not have standard business practices to fall back on. Nor is the regulation going to be static; changes will have to be monitored and incorporated into policies to which packaged, off-the-shelf compliance programs will not be flexible enough to adjust.
That was the message from a January panel discussion on corporate best practices at the Lipper-HedgeWorld Fund Services Expo in New York. That creates a fertile market opportunity for law firms and other service providers who understand the complexities of hedge funds and SEC regulations, but even consultants and system vendors advised caution.
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