Topics covered in this issue include:
The Other ‘CFO’ That Funds Should Know About
Structured finance transactions, whether of the CLO or CDO variety, are highly regulated today, following the losses certain types of these products suffered in and around the 2008 financial crisis. Nevertheless, with the strong performance of the leveraged finance market, the market for CLOs has rebounded strongly in the intervening years.
SEC Concept Release Could Yield New Retail Product Opportunities for Private Fund Managers
On June 18, 2019, the SEC issued a concept release requesting comments on, among other things, whether to liberalize the definition of “Accredited Investor” under Regulation D to cover a broader group of investors, including retail investors who meet certain non-income or asset-oriented qualifications, or who assume disclosed risks.
European Commission Issues ‘Ethics Guidelines for Trustworthy AI’
The European Commission released guidelines on the ethical use of artificial intelligence (AI) to ensure that its use is lawful, ethical and robust. To that end, the guidelines suggest seven “requirements” that outline both process improvements and social considerations and could presage more regulatory attention in the future. Companies doing business in Europe or processing European resident data using AI should pay close attention to these developments to ensure that they are deploying AI tools properly.
OCIE Warns That Investment Advisers and Broker-Dealers Are Putting Investor Information at Risk
The SEC’s Office of Compliance Inspections and Examinations (OCIE) observed deficiencies during examination of investment advisers’ and broker-dealers’ network storage solutions. Examination results showed gaps in configuration, policies and vendor oversight that may raise various compliance issues.