Category Archives: Press Releases

New Model For Hedge Fund Prime Brokerage?

Nirvana Solutions’ White Paper Predicts the Emergence of a New Model of Prime Brokerage – The Multi-Prime Service Platform

San Francisco – June 15, 2009 – The financial crisis of 2008 has upset the relatively stable equilibrium previously maintained between hedge fund managers and their traditional service providers, according to a white paper released today by Nirvana Solutions, provider of Nirvana (TM), a real-time portfolio management system for multi-prime hedge funds, prime brokers, and fund administrators.

The white paper, entitled “The New Model of Prime Brokerage – The Multi-Prime Service Platform,” documents the dynamic changes to the hedge fund industry and its service providers in the aftermath of the 2008 market crash. Peter Curley, managing partner at Nirvana Solutions, examines how the roles of traditional service providers have changed, leading to the emergence of a new service model providing the full range of hedge fund services through a single, real-time multi-prime infrastructure built on a common, outsourced technology platform.

“The profound impact the crisis has had on hedge funds has already been well- documented,” Curley said. “Another significant outcome of the crisis, we feel, will be the aggregation and convergence of services provided to hedge funds through a single service provider. This new service provider cannot be adequately described as a mini-prime or a fund administrator but rather a hybrid of both, a model we are calling The Multi-Prime Service Platform.”

New requirements, such as multi-prime technology that can provide real-time views of critical data such as exposures and risk, and impending hedge fund regulation, are now converging to significantly increase the barriers to entry for new hedge fund managers. The operational efficiencies achieved through The Multi-Prime Service Platform promises to provide the critical sub-$500 million segment of the hedge fund industry–where the tension between the new requirements and the hedge funds’ ability to pay is at its most intense–a cost effective, fully integrated solution providing real-time transparency in a multi-prime environment.

To download the white paper please visit: www.nirvanasolutions.com.

New Model For Prime Brokerage Whitepaper

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About Nirvana Solutions (www.nirvanasolutions.com):

Founded in 2006, Nirvana Solutions is a San Francisco based software company that provides real-time portfolio management systems to multi-prime hedge funds, prime brokers, and fund administrators. Nirvana™ is the hedge fund industry’s first portfolio management system built around the Financial Information Exchange (FIX) protocol. The ability to dynamically accept FIX messages, combined with the aggregation of multi-prime data, ensures true real-time views of critical measures such as P&L and Risk. Nirvana’s ability to offer real-time transparency is complemented by a full suite of on-demand and historical reporting. The Nirvana solution is made available in an easy-to-deploy Software as a Service (SaaS) model and can be implemented in a modular or complete fashion.

For Further Information, please contact:

Peter Curley
for Nirvana Solutions
(415) 513-8950
peter.curley@nirvanasolutions.com

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Please contact us if you have any questions or would like to start a hedge fund.  Other related hedge fund law articles include:

CFTC Proposes Reforms to Over-The-Counter Derivates Trading Regulation

Statement of Gary Gensler Chairman, Commodity Futures Trading Commission

On June 4th, 2009, Gary Gensler, Chairman of the Commodity Futures Trading Commission, held a hearing before the Senate Committee on Agriculture, Nutrition and Forestry to address the importance of enacting broad reforms to regulate over-the-counter (OTC) derivates.  Gensler emphasized that such reforms must comprehensively regulate both derivative dealers and the markets in which derivatives trade in order to build and restore confidence in our financial regulatory system.  Below is a summary of the reforms proposed in CFTC hearing:

I.  Comprehensive Regulatory Framework

A comprehensive regulatory framework governing OTC derivative dealers and OTC derivative markets should apply to all dealers and all derivatives, no matter what type of derivative is traded or marketed. It should include interest rate swaps, currency swaps, commodity swaps, credit default swaps, and equity swaps. Further, it should apply to the dealers and derivatives no matter what type of swaps or other derivatives may be invented in the future. This framework should apply regardless of whether the derivatives are standardized or customized.

A new regulatory framework for OTC derivatives markets should be designed to achieve four key objectives:

1.  Lower systemic risks

  • Setting capital requirements for derivative dealers;
  • Creating initial margin requirements for derivative dealers (whether dealing in standardized or customized swaps);
  • Requiring centralized clearing of standardized swaps; and
  • Requiring business conduct standards for dealers.

2.  Promote the transparency and efficiency of markets

  • Requiring that all OTC transactions, both standardized and customized, be reported to a regulated trade repository or central clearinghouses;
  • Requiring clearinghouses and trade repositories to make aggregate data on open positions and trading volumes available to the public;
  • Requiring clearinghouses and trade repositories to make data on any individual counterparty’s trades and positions available on a confidential basis to the CFTC and other regulators;
  • Requiring centralized clearing of standardized swaps;
  • Moving standardized products onto regulated exchanges and regulated, transparent trade execution systems;
  • Requiring the timely reporting of trades and prompt dissemination of prices and other trade information

3.  Promote market integrity by preventing fraud, manipulation, and other market abuses, and by setting position limits

  • Providing CFTC with clear, unimpeded authority to impose reporting requirements and to prevent fraud, manipulation and other types of market abuses;
  • Providing CFTC with authority to set position limits, including aggregate position limits;
  • Moving standardized products onto regulated exchanges and regulated, transparent trade execution systems;
  • Requiring business conduct standards for dealers.

4.  Protect the public from improper marketing practices.

  • Business conduct standards applied to derivatives dealers regardless of the type of instrument involved;
  • Amending the limitations on participating in the OTC derivatives market in current law to tighten them or to impose additional disclosure requirements, or standards of care (e.g. suitability or know your customer requirements) with respect to marketing of derivatives to institutions that infrequently trade in derivatives, such as small municipalities

To best achieve these objectives, Gensler  recommends implementing two complementary regulatory regimes: one focused on the dealers that make the markets in derivatives and one focused on the markets themselves – including regulated exchanges, electronic trading systems and clearing houses.

II.  Regulating Derivatives Dealers

The current financial crisis has taught us that the derivatives trading activities of a single firm can threaten the entire financial system and that all such firms should be subject to robust Federal regulation. Specifically, all derivative dealers should be subject to capital requirements, initial margining requirements, business conduct rules and reporting and recordkeeping requirements. Standards that already apply to some dealers, such as banking entities, should be strengthened and made consistent, regardless of the legal entity where the trading takes place.

 II (a). Capital and Margin Requirements

 The Congress should explicitly require regulators to promulgate capital requirements for all  derivatives dealers. Imposing prudent and conservative capital requirements, and initial margin  requirements, on all transactions by these dealers will help prevent the types of systemic risks  that AIG created. No longer would derivatives dealers or counterparties be able to amass large  or highly leveraged risks outside the oversight and prudential safeguards of regulators.

 II (b).  Business conduct and Transparency Requirements

 Business conduct standards should include measures to both protect the integrity of the market  and lower the risk (both counterparty and operating) from OTC derivatives transactions.

 To promote market integrity, the business conduct standards should:

  • Include prohibitions on fraud, manipulation and other abusive practices
  • Require adherence to position limits established by the CFTC on OTC derivatives that perform or affect a significant price discovery function with respect to regulated markets
  • Ensure the timely and accurate confirmation, processing, netting, documentation, and valuation of all transactions.
  • Require derivatives dealers to be subject to recordkeeping and reporting requirements for all of their OTC derivatives positions and transactions, including retaining a complete audit trail and mandated reporting of any trades that are not centrally cleared to a regulated trade repository
  • Provide transparency of the entire OTC derivates market by making this information available to all relevant federal regulators and making aggregated information on positions and trades available to the public
  • Provide clear authority for regulating and setting standards for trade repositories to ensure that the information recorded meets regulatory needs and the repositories have strong business conduct practices

III.  Regulating Derivates Markets

All derivatives that can be moved into central clearing should be required to be cleared through regulated central clearing houses and brought onto regulated exchanges or regulated transparent electronic trading systems.  Requiring clearing and trading on exchanges or through regulated electronic trading systems will promote transparency and market integrity and lower systemic risks.  To fully achieve these objectives, both of these complementary regimes must be enacted – Regulating both the traders and the trades will ensure that we cover both the actors and the actions that may create significant risks. To regulate both derivates and the market itself, the following areas need to be regulated:

a) Central clearing
b) Exchange-trading
c) Position limits
d) Standardized and customized derivates
e) Authority

III (a).  Central Clearing

Central clearing should help reduce systemic risks in addition to the benefits derived from  comprehensive regulation of derivatives dealers. Clearing reduces risks by facilitating the netting  of transactions and by mutualizing credit risks. Currently, most of the contracts entered into in  the OTC derivatives market are not cleared, and remain as bilateral contracts between individual  buyers and sellers. In contrast, when a contract between a buyer and seller is submitted to a  clearinghouse for clearing, the contract is “novated” to the clearinghouse. This means that the  clearinghouse is substituted as the counterparty to the contract and then stands between the  buyer and the seller.

Clearinghouses then guarantee the performance of each trade that is submitted for clearing.  Clearinghouses use a variety of risk management practices to assure the fulfillment of this  guarantee function. Foremost, derivatives clearinghouses would lower risk through the daily  discipline of marking to market the value of each transaction.

The regulations applicable to clearing should require central clearinghouses to:

  • Establish and maintain robust margin standards and other necessary risk controls and measures
  • Have transparent governance arrangements that incorporate a broad range of viewpoints from members and other market participants
  • Have fair and open access criteria that allow any firm that meets objective, prudent standards to participate regardless of whether it is a dealer or a firm
  • Implement rules that allow indirect participation in central clearing

III (b).  Exchange-Trading

Market transparency and efficiency would be further improved by moving the standardized part  of the OTC markets onto regulated exchanges and regulated transparent electronic trading  systems.  Furthermore, a system for the timely reporting of trades and prompt dissemination of  prices and other trade information to the public should be required. Both regulated exchanges  and regulated transparent trading systems should allow market participants to see all of the bids  and offers. A complete audit trail of all transactions on the exchanges or trade execution   systems should be available to the regulators. Through a trade reporting system there should be  timely public posting of the price, volume and key terms of completed transactions.

III (c).  Position Limits

Position limits must be applied consistently all markets, across all trading platforms, and  exemptions to them must be limited and well defined.  The CFTC should have the ability to  impose position limits, including aggregate limits, on all  persons trading OTC derivatives that  perform or affect a significant price discovery function with respect to regulated markets. Such  position limit authority should clearly empower the CFTC to establish aggregate position limits  across markets in order to ensure that traders are not able to avoid position limits in a market  by moving to a related exchange or market. Gensler anticipates that this new authority will  better enable the CFTC to protect the integrity of the price discovery process in the futures  markets and protect the public against fraud, manipulation and other abuses. 

III (d).  Standardized and Customized Derivatives

It is important that tailored or customized swaps that are not able to be cleared or traded on an  exchange be sufficiently regulated. Regulations should also ensure that customized derivatives  are not used solely as a means to avoid the clearing requirement. Genlser proposes that the  CFTC accomplish this in two ways:

  1. Regulators should be given full authority to prevent fraud, manipulation and other abuses and to impose recordkeeping and transparency requirements with respect to the trading of all swaps, including customized swaps.
  2. Ensure that dealers and traders cannot change just a few minor terms of a standardized swap to avoid clearing and the added transparency of exchanges and electronic trading systems

Additional criteria for consideration in determining whether a contract should be considered to  be a standardized swap contract should include:

  • The volume of transactions in the contract
  • The similarity of the terms in the contract to terms in standardized contracts
  • Whether any differences in terms from a standardized contract are of economic significance
  • The extent to which any of the terms in the contract, including price, are disseminated to third parties

III (e).  Authority

Lastly, to achieve the goals described above, the Commodity Exchange Act should be amended  to provide the CFTC with positive new authority to regulate OTC derivatives. The term “OTC  derivative” should be defined, and the CFTC should be given clear authority over all such  instruments. To the extent that specific types of OTC derivatives might best be regulated by  other regulatory agencies, care must be taken to avoid unnecessary duplication and overlap.
 As new laws and regulations are enacted, the CFTC should be careful not to call into question  the enforceability of existing OTC derivatives contracts. New legislation and regulations should  not provide excuses for traders to avoid performance under pre-existing, valid agreements or to  nullify pre-existing contractual obligations.

IV.  Conclusion

It is clear that we need the same type of comprehensive regulatory reform today. Today’s regulatory reform package should cover all types of OTC derivatives dealers and markets. It should provide the CFTC and other federal agencies with full authority regarding OTC derivatives to lower risk; promote transparency, efficiency, and market integrity and to protect the American public.

Today’s complex financial markets are global and irreversibly interlinked. We must work with our partners in regulating markets around the world to promote consistent rigor in enforcing standards that we demand of our markets to prevent regulatory arbitrage.

Advisors Tell SEC to Rethink Proposed Custody Rule

Overwhelming Majority of Investment Advisors Disagree with Proposed Changes to Custody Rule

In an effort to deter fraudulent activity, the SEC has proposed to amend Rule 206(4)-2, also known as the ‘custody rule’, to require that all registered investment advisers with custody of client assets engage an independent public accountant to conduct an annual surprise examination of client assets. According to this proposal, there would be no exception to the annual surprise inspection requirement for advisors who possess custody of client funds solely because they withdraw funds from client accounts for payment of a client’s fees. Of the 20 responses submitted to the SEC by investment advisors and related industry professionals, 2 respondents supported the proposal and 18 respondents were opposed. Several  of the respondents on both sides of the issue concede that, for those cases where a registered investment advisor does not use a qualified independent custodian, the proposed legislation offers a necessary higher level of scrutiny and oversight.

Respondent Rosamond R. Dewart, retired federal employee, states:

 ” I would support the proposed rule if […] it could accomplish the intent of the rule. Investment  advisers certainly need more scrutiny. I have lost confidence in the entire financial sector.”

However, the majority of respondents argue that the surprise examination requirement will grossly and negatively impact small-to-medium advisers who fall who only possess ‘custody’ of client accounts as described above. 

Carolyn Santo, a CFP from Hawaii, asserts in her response:

 “The proposed changes to the SEC rules involving making investment advisors pay for surprise  audits on themselves is a classic example of an unwieldy and clumsy attempt to protect the  investing public from a super micro-minority in the world of white collar crime.”

Those opposed to the proposed changes argue that, due to a number of recent enforcement actions against investment advisors alleging fraudulent conduct , many regulators and politicians assume that the ability to withdraw fees from a client account gives investment advisors complete control of the cash inside the account. Many assert that this assumption is simply not true, and additionally point out that the costs assumed for the surprise audit may be unrealistic and unfair to small-to-medium advisors, forcing some advisors to pass these costs along to client investors.

Peter J. Chepucavage, General Counsel of Plexus Consluting LLC, states:

 ” We think the added cost is disproportionate to the added compensation, a fact often present  in one size fits all regulation.”

Another respondent, John M. Smartt, Jr., CPA, adds:

 ” The additional proposed regulation, annual audit, is a significantly higher cost without  significant benefits. An estimated $8,100 audit charge would cost me more than 10% of my  current gross income (as a Tennessee RIA)”.

Some opposed to the new regulation have offered some constructive suggestions as to compliance alternatives that the SEC ought to consider:

  • Changing the definition of “custody” for accounts held at regulated third party custodians such as brokerage firms and/or trust companies
  • Increasing public knowledge by disseminating information about the entire industry
  • Increasing investigation of Red Flag situations (i.e. large withdrawals and lavish spending)
  • Establishing a substantial reward for information leading to the discovery of a financial scam
  • Requiring a higher level of disclosure of the independent custodian to the client when cumulative withdrawals are greater than an established percent of the account’s value for the prior quarter.

With regards to the suggestion for greater disclosure, Warren Mackensen, founder of Mackensen & Company, Inc., strongly encourages the SEC to implement the following additional four (4) client protection controls for advisers who debit fees from client accounts to avoid unnecessary an costly annual surprise examinations by a CPA firm:

  • Requiring custodians to limit fee deductions to, say, 2%, which would provide sufficient investor protection that the adviser is not absconding with client assets
  • Requiring at least quarterly statements directly from the qualified custodian (our clients receive monthly statements)
  • Requiring the custodians to send statements in any month in which a client fee was deducted (more immediate notice to the clients if statements are otherwise quarterly); and
  • Requiring the investment adviser to send an invoice showing the fee calculation directly to the client so that the client may compare the fee computation with his/her monthly statement showing the debited fee.

Others opposed to the proposed changes have noted the following additional points with regards to client protections already in place when an adviser uses a qualified custodian:

  • The third party custodian already acts as a gatekeeper to the advisors ability to pull funds from client accounts, making it virtually impossible for a an advisor using a major third party custodian, such as Charles Schwab, TD Ameritrade, Fidelity, etc.) to ‘drain the account’ through fees, as they will not process withdrawals that exceed a certain percentage per year. 
  • Any advisor who is able to deduct fees from client accounts needs written authorization to make payments to anyone other than the client, adding an extra layer of protection for the client.

Overall, it appears that the overwhelming response to the proposed legislation indicates that the majority of investment advisors would prefer that the SEC adopt less costly and less time-consuming compliance alternatives  to maximize investor protection.  With regards to the anticipated effectiveness of the proposed legislation, Carolyn Santo writes,

 ” The wrongful taking of client assets is a criminal act, and increasing the regulatory burden on  the entire industry is not going to lessen the fact that a small number of people are dishonest  and will steal from clients.”

To view all comments submitted to the SEC regarding the proposed amendments to Rule 206(4)-2, including discussions from the above-cited respondents, please visit:
http://www.sec.gov/comments/s7-09-09/s70909.shtml

New Initiative to Assist in the Sale of Devalued Loans and Securities: Public Private Investment Program

Public Private Investment Program and its Regulatory Measures

In a statement set forth on May 20th, 2009 before the Senate Banking Committee, Timothy F. Geithner, U.S. Secretary of the Treasury, discusses the rehabilitative financial programs and regulatory measures proposed by Congress in response to the nation’s financial upheaval and economic uncertainty.  These initiatives are introduced as a follow-up to the Emergency Economic Stabilization Act (EESA), passed by Congress in October of 2008 with the specific goal of stabilizing the nation’s financial system and preventing catastrophic collapse.  One such initiative designed to assist in the sale of devalued loans and securities is the Public Private Investment Program (PPIP).

The PPIP is designed as part of an overall strategy to resolve the crisis as quickly as possible with the least cost to the taxpayer. As asset prices have been pushed to extremely low levels, obtaining private financing on reasonable terms to purchase these assets has become increasingly difficult, further reducing the ability of financial institutions to provide new credit. The resulting uncertainty about the value of these assets has also constrained the ability of financial institutions to raise private capital.  The PPIP is intended to restart the market for those assets lost in the course of deleveraging, while restoring bank balance sheets as these devalued loans and securities are sold.  Using $75 to $100 billion in capital from EESA and capital from private investors – as well as funding enabled by the Federal Reserve and FDIC – PPIP will generate $500 billion in purchasing power to buy legacy assets, with the potential to expand to $1 trillion over time. By providing a market for these assets, PPIP will help improve asset values, increase lending capacity for banks, and reduce uncertainty about the scale of losses on bank balance sheets – making it easier for banks to raise private capital and replace the capital investments made by Treasury.

PPIP will follow three basic principles in its strategy:

  1. Making the most of taxpayer dollars:  Maximize utility of taxpayer resources under the Emergency Economic Stabilization Act (EESA) by partnering with the FDIC, the Federal Reserve, and private sector investors
  2. Sharking risk with the private sector:  Ensure that private sector participants invest alongside the government, with the private sector investors standing to lose money in a downside scenario and the taxpayer sharing in profitable returns
  3. Taking advantage of private sector competition to set prices for currently illiquid assets:  Use competing private sector investors to engage in price discovery, reducing the likelihood that the government will overpay for these assets

The PPIP will have two major components – securities and loans. The Legacy Securities program will target commercial mortgage-backed securities and residential mortgage-backed securities, and the Legacy Loans Program is designed to attract private capital to purchase eligible legacy loans and other assets from participating banks through the availability of FDIC debt guarantees and Treasury equity co-investments.  The terms of funding provided for both parts of the PPIP, including fees, will be set in a way that is designed to limit the risks faced by U.C. taxpayers while still meeting the objective of generating new demand for legacy assets.  In addition, those participating in the program will be subject to a significant degree of oversight to ensure that their actions are consistent with the objectives of the program. The U.S. Secretary of the Treasury expects the PPIP to begin operating over the next six weeks.

In response to the heightened systemic risk experienced by the securities markets due to rapid growth of the largest financial institutions, a more conservative regulatory regime is also being proposed to govern the sale of loans and securities. In addition to addressing the potential insolvency of individual financial institutions, the new regulatory measures are designed to ensure the stability and consistency of the system itself. The new comprehensive reforms will offer the following improvements:

  • Meaningful & simply stated disclosures that actual consumers and investors can understand
  • Clear , reasonable, and appropriate financial choices offered to consumer
  • Clear accountability, authority, and resources for protecting consumers and investors
  • Global consistency with U.S. standards for financial regulation
  • Material improvements to prudential supervision, tax compliance, and restrictions on money laundering in weakly-regulated jurisdictions
  • Resolution authority that would grant additional tools to avoid the disorderly liquidation of the largest (systemically significant) financial institutions

Geithner concludes his discussion by stating that the central obligation of the U.S. Treasury is to ensure that the economy is able to recover as quickly as possible. To achieve this recovery, the Treasury commits to restore 1) a stable financial system that is able to provide the credit necessary for economic recovery, 2) the strict observance of comprehensive regulatory reforms that deter fraud and abuse while rewarding innovation and performance.

Hedge Fund Administrator Charity

As described in the press release reprinted below a hedge fund administrator is providing reduced fees to clients who donate their set up fees to Hedge Funds Care, a charity which benefits abused children.  Hedge Funds Care puts on a number of events throughout the US.  The San Francisco Hedge Funds Care group will be putting on an event on March 11 – more on this event to be forthcoming.

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Hedge Fund Administrator Offers Discount Pricing to Emerging Hedge Fund Managers Who Donate Set-up Fees to Hedge Funds Care

NEW YORK, Feb. 17 /PRNewswire/ — Variman LLC, (www.variman.com) a boutique provider of hedge fund administration, middle and back office services, joins together with Hedge Funds Care (www.hedgefundscare.org) to increase awareness of child abuse and assist its efforts to prevent and treat child abuse.

Variman Fund Services will offer discounted monthly service fees to emerging managers who donate the standard set-up fee to Hedge Funds Care on behalf of Variman LLC for a limited time.
Given the difficult times our industry is currently facing, Variman Fund Services, in an effort to support both the needs of the marketplace and those of abused children, believes this initiative will be worthwhile and bring solid value to all involved.

For further information, please log on to www.variman.com and provide contact information as needed for a quick response. This is a limited time offer and applies to emerging hedge fund managers requiring hedge fund administration. All information will be held strictly confidential.

About Variman LLC

Variman LLC, headquartered in Short Hills, NJ, USA with offices in Dubai and India, brings a fresh perspective to Capital Markets Operations and Hedge Fund Administration with its unique service platform to provide complete visibility to all aspects of post-trade processing including liquidity management and collateral optimization

Variman Fund Services remains one of the few administrators to offer bespoke white glove services according to client requirements and budget. Variman Fund Services can efficiently deal with multiple brokers, global middle and back office operations and accounting functions across asset all classes and time zones.

About Hedge Funds Care

Founder Rob Davis established Hedge Funds Care in 1998 with the dream of helping to prevent and treat child abuse. With the encouragement and participation of his colleagues in the hedge fund industry, the first Open Your Heart to the Children Benefit took place in New York in February of 1999 and raised $542,000. What began as a single fundraiser has grown into an international nonprofit organization. Hedge Funds Care has distributed over $18 million through more than 500 grants. In 2009, annual benefits will take place in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, London and the Cayman Islands. Through the ongoing generosity and commitment of hedge fund industry professionals, HFC continues its rapid expansion. We anticipate future growth to cities in the U.S. and abroad.

Hedge Fund Administrator Completes SAS 70 Type II (Press Release)

GlobeOp Successfully Completes SAS 70 Type II Examination for Second Consecutive Year

LONDON, UK; NEW YORK, NY, USA – 4 December 2008 – GlobeOp Financial Services (“GlobeOp®”, LSE:GO.) today announced that, for the second consecutive year, it has successfully completed a SAS 70 Type II examination of specified middle-, back-office and fund administration controls by accounting and auditing firm Ernst & Young LLP. Continue reading

Open Letter to CEOs of SEC-Registered Firms (SEC Release)

Open Letter to CEOs of SEC-Registered Firms
December 2, 2008

Dear CEO of SEC-Registered Firm:

During this time of financial and market turmoil, the Office of Compliance Inspections and Examinations of the Securities and Exchange Commission reminds leaders of SEC-registered firms, including broker-dealers, investment advisers, investment companies and transfer agents, of the critical role played by your firm’s compliance programs in helping to meet your obligations under the securities laws. Your firm’s compliance function is critical to assure that your operations comply with the law and rules for industry participation and to ensure that the interests of your customers, clients and shareholders are protected. Moreover, compliance is a vital control function that helps to protect the firm from conduct that could negatively impact the firm’s business and its reputation. Continue reading

SEC Staff Reminds CEOs Of Registered Firms of Importance of Compliance Programs (SEC Release)

SEC Staff Reminds CEOs Of Registered Firms of Importance of Compliance Programs
FOR IMMEDIATE RELEASE
2008-283

Washington, D.C., Dec. 2, 2008 — The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations today issued an open letter to chief executives of SEC-registered firms, including broker-dealers, investment advisers, investment companies and transfer agents, to remind them of the critical role played by their firms’ compliance programs in assuring that their operations comply with the law and rules for industry participation and to ensure that the interests of customers or clients are protected. Continue reading

Hedge Fund Accounting Firm Named Tops in 2008 (Press Release)

Rothstein Kass Rated Top Accounting Firm in 2008 Hedge Fund Service Providers Survey by Alpha Magazine

NEW YORK, Dec 01, 2008 /PRNewswire via COMTEX/ — CPA firm Rothstein Kass rated first among accounting firms in the 2008 Alpha Awards(TM), an annual ranking of hedge fund service providers sponsored by Institutional Investor’s Alpha Magazine. Results were based on voting by more than 1,000 hedge fund firms with aggregate assets in excess of $1.5 trillion. Researchers asked participants to rate the quality of service received during the 12 month period ended March 31, 2008. Rothstein Kass finished first overall for client service and also topped the list of “small firms’ favorites,” and “big firms’ favorites.” The firm was also the top firm in the “audit,” “regulatory & compliance” and “hedge fund expertise” categories. Continue reading

Hedge Funds Regulation – Survey Indicates More Regulation Expected

The following is a press release from Rothstein Kass.

HEDGE FUND MANAGERS ANTICIPATE INCREASED REGULATION UNDER NEW PRESIDENTIAL ADMINISTRATION ACCORDING TO NEW SURVEY FROM CPA FIRM ROTHSTEIN KASS

Majority of Senior Partners at U.S. Firms Expect Rising Compliance Costs Will Make Hedge Funds More Costly to Operate Continue reading