Insights from Chuck Martin
Chuck provided a statement, saying that “a point for directors to discuss is how the strategic plan indicates the commission will use technology, particularly artificial intelligence, to identify risk in the investment industry.”
He noted that the commission has had a Center for Risk and Quantitative Analytics initiative for almost a decade and that examiners are sophisticated at systematically analyzing trading and other activities to identify bad behavior. He urged fund directors to pay careful attention to all third-party vendors, where problems may be more likely to arise.
One final takeaway from Chuck in the article was where he asked what level of review and analysis is being done, and what kind of action is being taken, which he notes as something he does not hear enough of.
Vigilant’s Final Conclusion
The drafted Strategic Plan was developed to emphasize and strengthen the SEC’s mission to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” This has been a continual trend throughout 2022 and it appears it will continue to be the case for future years to come.
Fund Directors need to be aware of potential problems that can arise and to be aware of all third-party vendors.
As new Proposed and Effective Rules come into place more frequently, it can become difficult to follow and stay up to speed on them. If you are in need of Compliance assistance, please feel free contact Vigilant, as we are happy to help address your Compliance needs.