Monday, 27 March 2017
Last updated 6 hours ago
Feb 13 2014 | 11:04am ET
Hedge fund and private-equity firms are doing pretty well in the Securities and Exchange Commission's new "presence exams."
The SEC said last week that it is issuing deficiency letters to only about half of the firms its reviewed so far. Routine exams yield deficiency letters in about 80% of cases, Ashish Ward, the SEC's exam manager in Los Angeles, told Thomson Reuters.
The "presence exams" are being conducted at the roughly 1,500 new private investment advisers required to register under the Dodd-Frank financial reform law. Such exams take less time that routine exams, but focus extensively on areas such as valuation, conflicts of interest and custody arrangements.
The SEC has conducted 250 such exams on newly-registered firms, putting it on pace to meet its goal of auditing 25% of them within two years.