Compliance & Ethics

Private equity and hedge funds, cornerstones of the investment world, are bracing themselves for a potentially transformative regulatory shift as the U.S. Securities and Exchange Commission (SEC) gears up to unveil a rule package aimed at enhancing transparency, competition, and investor protection in the private-funds industry. With hundreds of billions of dollars in fees and expenses at stake, this regulatory overhaul could reshape the landscape for managing funds on behalf of high-net-worth individuals and institutional investors.

The UK government has released its latest edition of the National Risk Register (NRR), shedding light on the nation's most serious risks and potential threats. The NRR, an external version of the National Security Risk Assessment (NSRA), encompasses a wide array of challenges, ranging from health and societal risks to cyber threats and state-level dangers. As the UK navigates a complex risk landscape, the NRR offers insights into the country's preparedness and resilience strategies.

In response to the events of the first half of 2023, a group of federal agencies, including the Federal Reserve, has issued joint guidance on risk management and contingency funding for depository institutions. The guidance emphasizes the importance of liquidity risk management and preparedness in the face of evolving depositor behavior and market conditions.

The U.S. Securities and Exchange Commission (SEC) has raised concerns about weak anti-money laundering (AML) policies and staffing issues within broker-dealers, highlighting the critical importance of AML compliance for investor asset safety and financial market integrity. The Division of Examinations conducted examinations of broker-dealers in 2021, focusing on AML and countering the financing of terrorism (CFT) requirements. A Risk Alert was issued by the Division, addressing compliance issues related to suspicious activity monitoring and reporting components of AML programs, as well as other key AML requirements.

Martin's Point Health Care Inc., a healthcare provider based in Portland, Maine, has reached a settlement with the Department of Justice (DOJ) to pay $22.5 million to resolve allegations of violating the False Claims Act. The accusations were related to submitting inaccurate diagnosis codes for its Medicare Advantage Plan enrollees, leading to increased reimbursements from Medicare.

In a bid to combat illicit financial activities and strengthen its reputation as a global financial and business hub, the United Arab Emirates (UAE) has announced the establishment of judicial bodies dedicated to prosecuting money laundering and economic crimes. The move comes in response to increased scrutiny from international watchdogs, particularly the Paris-based Financial Action Task Force (FATF), which added the UAE to its "grey list" in March 2022 due to concerns over illicit finance.

The Competition and Markets Authority (CMA), Britain's antitrust regulator, has opened an inquiry into Microsoft's proposed $69 billion takeover of Activision Blizzard. The deal, which was previously blocked in April, is now under review again, with a final decision expected by August 29.