As the regulatory landscape for financial services continues to evolve, investment companies are finding themselves at a crossroads.
ESG investing focuses on incorporating environmental, social, and governance principles into a fund’s investment strategy. These portfolios often consist of investments in assets that promote green energy, climate preservation, Diversity, Equity, and Inclusion initiatives, and equal access to opportunities.
The Rise of Artificial Intelligence in Investment Strategies and the Role of Compliance
Amid escalating global tensions and geopolitical uncertainties, numerous bills are being researched and proposed to minimize the impact to United States financial markets.
SEC v. Jarkesy: Navigating Changes to the Regulatory Landscape
The Securities and Exchange Commission (SEC) has recently released new or updated rules related to three key areas for asset managers: short positions, securities lending, and beneficial ownership. All three final rules were issued in October of this year with effective dates of early 2024.
On August 23rd, the Securities and Exchange Commission (SEC) approved new rules aimed at improving the operations of private fund advisers and updating compliance regulations for investment advisers. Despite facing some resistance from firms, the SEC has asserted that these rules offer several benefits to investors when implemented.
On June 16th the SEC published a press release detailing the charges against the Pacific Investment Management Company LLC (PIMCO). PIMCO is one of the largest global asset managers in the world with nearly 3,500 employees worldwide and >$1.8 trillion in Assets Under Management (AUM) as of March 2023.
SEC Proposes Changes to Current Custody Rule
In February 2023, the SEC proposed expansive changes concerning Safeguarding Advisory Client Assets (Safeguarding Proposed Rule), which would amend rules around the custody of client funds or securities. Under Rule 206(4)-2, investment advisers must safeguard client funds and securities in their possession or where they have the authority to obtain control of them. The proposed rules would make broad and significant changes to the current custody rule, enhancing the role of custodians and increasing compliance burdens on advisory firms.
How to Build a Culture of Compliance
When investment professionals use their considerable expertise to perpetuate a fraud, they usually rely on that same expertise to cover it up. The more complex the financial instrument or approach, the better, since most people are uncomfortable questioning things they may not understand.