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Client Relationship Management: A "Must-Have" Tool for Hedge Funds

By Eze Castle Integration,
Thursday, May 25th, 2017

In today’s market, the pressure from both investors and regulators is at a steady incline. Reporting obligations have grown complex, transparency is in high demand and compliance technology has become a vital component to a firm’s success. With various demands tug-o-warring hedge fund managers in multiple directions, a Client Relationship Management (CRM) platform could be the solution your financial firm has been searching for.  Ledgex CRM, Hedge Fund Technology

That is why firms are increasingly adopting Ledgex CRM, the revolutionary, stand-alone Client Relationship Management solution offered by our sister company, Ledgex Systems. Ledgex CRM is ideal for managing and tracking investor communications, sales pipelines, client relationships and capital movements. The highly configurable, centralized platform is tailor-made for hedge funds, family offices and asset allocators. 

The product offers the sophisticated Client Relationship Management capabilities necessary to raise and retain more assets, maintain and grow clients, provide outstanding client service and meet heightened reporting requirements. Out of the box, the web-based solution delivers efficiencies, transparency and flexibility without increasing headcount or costs. By streamlining investor relationship management and capital activity, Ledgex CRM enables managers to optimize their time and focus on fostering relations and growing business.

Categorized under: Software  Hedge Fund Operations  Hedge Fund Regulation  Communications 



Essential Building Blocks to Hedge Fund Cyber Risk Management

By Lauren Zdanis,
Thursday, March 23rd, 2017

The following article originally appeared in HFMWeek's Cyber Compliance Focus.Hedge Fund Cybersecurity Compliance

It’s not enough to have strong security policies. And it’s not enough to have robust technologies in place to ward off cyber threats. In truth, it’s not even enough to have both of these.

An effective cybersecurity program, rather, can only be achieved through a consistent and comprehensive strategy that touches layers across the entirety of the organization – from perimeter security and access control to policy enforcement and employee training. Without each of these building blocks, the effectiveness of a cyber risk management program is crippled at best.

And today’s standards for cybersecurity are increasing rapidly.

Categorized under: Security  Private Equity  Hedge Fund Operations  Hedge Fund Regulation  Outsourcing  Infrastructure  Communications  Trends We're Seeing 



Cybersecurity Basics for Asset Managers (Webinar Replay)

By Katelyn Orrok,
Tuesday, February 28th, 2017

When it comes to cybersecurity, the list of haves and have nots is constantly evolving due to the changing regulatory and threat landscape. In case you missed it, we hosted a webinar this week on Cybersecurity Basics for Asset Managers, during which we uncovered various elements within three primary cybersecurity layers: from Tier 0 (Basic Protection) to Tier 1 (Industry Standard) to Tier 2 (Advanced Protection).

How does your firm stack up when it comes to your cybersecurity practices? Watch the replay below and find out where you fit in.

  • Tier 0: We call this level Tier 0 in part because, well, there’s zero chance your firm will have long-term success in thwarting cyber risks if you don’t employ these basic security measures.

Categorized under: Security  Hedge Fund Operations  Hedge Fund Regulation  Infrastructure  Videos And Infographics 



Then and Now: State of the Hedge Fund Industry

By Kaleigh Alessandro,
Thursday, February 16th, 2017

They say the more things change, the more they stay the same. Turns out it’s a pretty accurate assessment of the hedge fund industry then and now.

You see, back in 2011 we hosted a “State of the Hedge Fund Industry” event that yielded some interesting trends and perspectives, and we thought it might be fun to not only look back at those trends, but compare them to what we’re seeing in today’s industry – more than five years later.

Like I said: the more things change, the more they stay the same.

Hedge Fund Market Trends & Challenges

THEN (2011): It’s been an interesting year thus far for hedge funds and other alternative investment firms, as inflows have been high but performance low. In addition to performance challenges, hedge funds continue to deal with increased competition for investments, and thus asset-raising remains a hurdle for many funds – regardless of their size or strategy.

Categorized under: Trends We're Seeing  Launching A Hedge Fund  Cloud Computing  Security  Disaster Recovery  Hedge Fund Regulation  Business Continuity Planning 



How to Create a Human Firewall: Proactive Cyber Advice

By Mary Beth Hamilton,
Thursday, February 2nd, 2017

How much security protection is enough? That’s a tough question to answer and the catalyst behind our recently published whitepaper on selecting the right cybersecurity tier based on individual risk profiles (download it HERE). The paper outlines three common tiers including Tier 0 (the ‘must-have’ list) to Tier 2 (the ‘advanced’ list), however it only touches briefly on the human element of security.

The reality is that in today’s sophisticated cyber environment firms must go beyond physical or virtual firewalls firms and establish a ‘Human Firewall,’ because sometimes technology alone won’t stop some of the most damaging attacks. In many instances, employees are “holding the door open” to criminals or inadvertently “leaving the keys out.” At other times, disgruntled employees act with more malicious intent.

Building a ‘human firewall’ comes down to establishing a security-conscious workplace and culture where employees understand the risk landscape and know how to respond. So what goes into their ‘human firewall’? It has varying parts including policies, training, awareness and of course people(!).

Practical, User-Friendly Policies

Many firms create a 20+ page written information security plan that formalizes the definitions and policies that govern the creation, access, and deletion of confidential information and computing services. That can be everything from a definition of personally identifiable information (PII), a description of user access privileges and roles, or policies regarding data handling. What matters is that you’ve explicitly and unambiguously documented all aspects of your company’s at-risk assets and services.

While the plan should be comprehensive, firms should also avoid getting bogged down in “tech speak.” Employees need user-friendly policies that are straightforward to follow. For example, they want to know the implications of their actions (“If I read this on a mobile phone, am I creating a security vulnerability?” “What happens if I lose my mobile device?”).

Categorized under: Security  Launching A Hedge Fund  Private Equity  Hedge Fund Operations  Hedge Fund Regulation  Trends We're Seeing 



2017 Outlook for Hedge Funds: Risk, Regulation and Cybersecurity

By Kaleigh Alessandro,
Thursday, December 8th, 2016

2017 is already shaping up to be an interesting year. With a new presidential administration taking office and the hedge fund industry coming off the heels of a challenging year, there’s a lot to keep an eye on. We recently hosted a panel with law firm Morgan Lewis to discuss these and many other topics as part of our “2017 Outlook for Hedge Funds: Risk, Regulation and Technology” event.

Read on for some of our panel’s key takeaways.

2017 Regulatory Outlook

  • While little is known about how a Trump presidency will operate, there could be potential tax savings for managers depending on how the administration chooses to regulate Wall Street.

  • Firms should expect to see reforms with the Dodd-Frank Act and the Volcker Rule, which could add more competition into the marketplace if limits on bank investments are adjusted.

SEC Focus Areas

  • Top six areas of focus for the Securities & Exchange Commission will likely be: (1) expenses and fees, (2) trade allocation, (3) material non-public personal information, (4) valuation processes, (5) operating partners and due diligence, and (6) security, privacy, insider trading and business continuity.

  • Cybersecurity is not necessarily part of every SEC examination, however, the bar will continue to be raised in terms of preparations firms will need to employ.

  • In 2016, the SEC provided additional guidance on business continuity and transition plan requirements, highlighting the need for hedge fund and financial firms to maintain their fiduciary responsibility to their clients and investors.

Categorized under: Security  Cloud Computing  Outsourcing  Disaster Recovery  Hedge Fund Operations  Hedge Fund Regulation  Infrastructure  Business Continuity Planning  Trends We're Seeing 



Five Ways to Impress Hedge Fund Investors at Your Next Due Diligence Meeting

By Kaleigh Alessandro,
Thursday, November 17th, 2016

Operational due diligence meetings have become impactful moments for hedge funds to impress both current and potential investors. Firms have the ability to answer questions, alleviate fears and market themselves in a one-on-one setting that affords more opportunity than a completed due diligence questionnaire and an up-to-date performance sheet.
 
But how can today’s hedge funds truly set themselves apart and impress investors during these ODD meetings? Here are five ways:

1. Demonstrate your knowledge of and commitment to regulatory compliance.

Increasing regulatory oversight of investment firms has been a consistent trend over the course of the last few years, and it can be a challenge for hedge funds to keep abreast of changing legislation and regulator expectations. Disclosure and reporting requirements under the Investment Advisers Act of 1940, record-keeping requirements under the Dodd-Frank Act, and growing cybersecurity recommendations as part of the SEC’s ongoing inquiry are just a few of the initiatives to keep track of. But demonstrating to investors that your firm has knowledge of these regulations and takes them seriously will serve you well.
 
Whether your firm is compliant to the SEC, FINRA, NFA, CFTC, FCA – phew! – or another regulatory body, it’s imperative that you take the time to fully understand your firm’s legislative requirements and, in writing, show investors your level of preparedness. For example, if you’re a registered investment adviser with the SEC, are you aware of the proposed rule that would require firms to implement business continuity and transition plans? Have you compiled a document that outlines the SEC’s 28 points identified in its cybersecurity risk alert? Coming to your next investor due diligence meetings with this knowledge and the appropriate documentation will demonstrate that you take regulatory compliance seriously and are equipped to comply with the necessary requirements facing your organization. 

Categorized under: Operational Due Diligence  Security  Disaster Recovery  Hedge Fund Operations  Hedge Fund Regulation  Trends We're Seeing 



Hedge Fund Risk Management: Establishing Controls and Governance (Video)

By Katelyn Orrok,
Tuesday, October 25th, 2016

To wrap up and round out our 6-week Risk Outlook Webinar Series, we spoke with John Cotronis, Executive Director at JP Morgan, about hedge fund risk management and governance. Specifically, he addressed the following questions:

  • What have you observed in recent years in terms of changes affecting hedge funds – particularly at the startup phase?

  • Have you noticed a marked shift in the importance managers are placing on risk?

  • Do the firms you typically engage with have staff on hand to manage risk – compliance officers, etc.?

  • In terms of corporate governance, where do you see investment firms excelling when it comes to implementing risk management controls and also fostering a culture of risk management across the firm?

  • Let’s talk a little bit about counterparty risk. What kind of criteria are you looking for that indicates to you a provider has the right risk management framework and best practice structure to support your clients?

  • A lot has gotten tougher for firms, particularly on the investment side with capital raising, also with regulatory reporting, etc. What areas of operations do you think have gotten easier for hedge funds over the years?

  • What is your assessment of outsourcing risk – is it higher or lower than managing various functions in-house?

Categorized under: Hedge Fund Operations  Cloud Computing  Security  Hedge Fund Regulation  Outsourcing  Trends We're Seeing  Videos And Infographics 



Regulatory Risk for Investment Advisers: Guidance, Enforcement and Compliance

By Katelyn Orrok,
Tuesday, October 18th, 2016

As our Risk Outlook Series continues, we recently spoke with John Araneo, Partner at Cole-Frieman & Mallon LLP in New York, about many of the regulatory risks facing hedge funds today, including compliance, expense allocations and cybersecurity. Continue reading for a brief synopsis or scroll down to watch our webinar replay below. 

How would you describe the current regulatory climate for fund managers and investment advisers?

For hedge fund managers and investment advisers, the regulatory expectations have never been higher. Looking ahead to 2017, managers and advisers should expect the challenge of having to navigate potentially seismic regulatory changes - each of which has the potential to complicate business practices and add to the cost and complexity of compliance.

How should clients prepare to react to these changes?

It’s a top-down approach that all comes down to compliance. A culture of compliance is no longer a lofty goal or a cliché; it is now a regulatory expectation. There needs to be a robust compliance program, actual implementation, and accountability. Clients should be prepared and able to effectively manage the SEC examinations. Managers need to take time to understand regulatory priorities and expectations before an exam.

What is the current regulatory regime's appetite for outsourcing the compliance function?

There is no requirement for firms to employ a full-time person to service compliance. However, the worries about outsourcing certain functions, particularly the compliance officer function, may lead to weakened compliance culture. The opportunity of outsourcing creates a gap between the compliance function and the operations, decision makers and day-to-day activities. Outsourcing can be effective and sufficient, but management needs to resist setting it and forgetting it.

Categorized under: Hedge Fund Regulation  Security  Hedge Fund Operations  Trends We're Seeing  Videos And Infographics 



Addressing Hedge Fund Audit Risk: Insights from KPMG

By Katelyn Orrok,
Thursday, October 13th, 2016

Categorized under: Hedge Fund Operations  Hedge Fund Regulation  Outsourcing 



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