OCIE is intending to review newly registered hedge and private equity fund advisers by focusing in on certain priorities.
In particular, OCIE will review due diligence practices; fraud indicators; unknown service providers; problem custody arrangements; insider trading and front running issues; and preferential treatment to determine if there are conflicts of interest. OCIE also intends to take a global approach and not look at any one particular issue. OCIE’s focus will, most certainly, focus in on complex entities with high frequency trading. Such a review will include an SEC staff examination of fund governance; compliance, audit and management functions; protection of assets; and the transmission of performance data and advertising.
These principals will guide the OCIE staff in conducting examinations along with the new OCIE examination manual.