May 7, 2021

Volume XI, Number 127

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Six Feet Away – SEC OCIE Announces Risk Considerations Pertaining to COVID-19

On August 12, the SEC’s Office of Compliance Inspections and Examinations released a Risk Alert regarding new operational, technological, commercial and other challenges and issues for investment advisers and broker-dealers pertaining to COVID-19. Key takeaways include:

  • Have procedures in place to handle mail if you don’t have people in the office daily

  • Take steps to ensure authenticity of identity and validity of actions, including establishing backup contacts and investigating unusual trades/withdrawals

  • Update supervision policies to account for working remotely (while the OCIE alert doesn’t make specific recommendations, a recent FINRA Regulatory Notice on the same topic provides some real life examples)

  • Closely look at fees, expenses and conflicts, especially when market volatility could increase the risk of misbehavior

  • Consider if business continuity policies need to be updated to account for working remotely or expanding people’s roles due to sickness.

  • Monitor security and systems – are more servers needed due to working remotely, ensure security of vacant or semi-vacant facilities, ensure sufficient infrastructure support for remote sites, etc.

  • Be vigilant about cybersecurity, including multifactor authentication, keeping remote access servers secured and patched, procedures for allowing third parties to access systems remotely, etc.

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© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 238
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About this Author

Daniel L. McAvoy Shareholder Investment Funds Securities & Corporate Finance Mergers, Acquisitions and Divestitures Corporate and Transactional Joint Ventures and Strategic Alliances
Shareholder

Dan McAvoy focuses his practice on private closed-end investment funds, corporate finance and M&A with a focus on private investment fund transactions, including complex GP-led restructurings and secondary transactions. Dan is a trusted adviser to numerous investment advisers, fund sponsors and investors, and has represented a range of companies, from startups to Fortune 500 companies. Dan has also represented portfolio companies and sponsors through all parts of the corporate life cycle, including formation, venture financings, add-ons, stock sales, asset sales, private and...

212-413-2844
Stephen A. Rutenberg Shareholder Polsinelli New York Bankruptcy and Financial Restructuring Bankruptcy Litigation Capital Markets ,Commercial Lending ,Debt and Claims Trading, Financial Services, Insolvency, Financial Technology FinTech and Regulation
Shareholder

Stephen Rutenberg’s practice focuses on the intersection of special situations investing and FinTech including cryptocurrency and blockchain technology. 

A significant component of Stephen’s practice relates to his work in the distressed debt market, representing clients in the purchase and sale of loans and securities of distressed and bankrupt companies. Recent representations include advising on the purchase, sale and financing of bankruptcy trade claims in several major chapter 11 cases, including Lehman Brothers, and the MF Global and Icelandic bank liquidations. He works with...

212.413.2843
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