{"id":82991,"date":"2022-10-28T02:58:00","date_gmt":"2022-10-28T06:58:00","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=82991"},"modified":"2022-10-28T02:59:58","modified_gmt":"2022-10-28T06:59:58","slug":"sec-proposes-new-oversight-requirements-for-certain-services-outsourced-by-investment-advisers","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/10\/2022\/sec-proposes-new-oversight-requirements-for-certain-services-outsourced-by-investment-advisers.html","title":{"rendered":"SEC Proposes New Oversight Requirements for Certain Services Outsourced by Investment Advisers"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has proposed a new rule and rule amendments under the <strong>Investment Advisers Act of 1940 <\/strong>to prohibit registered investment advisers from outsourcing certain services and functions without conducting due diligence and monitoring of the service providers.<\/p>\n\n\n\n<p>\u201cRegistered investment advisers \u2014 more than 15,000 of them in total \u2014 play a critical role in our economy, advising more than 60 million accounts with combined assets under management of over $100 trillion,\u201d said SEC Chair Gary Gensler. \u201cThough investment advisers have used third-party service providers for decades, their increasing use has led staff to make several recommendations to ensure advisers that use them continue to meet their obligations to the investing public. When an investment adviser outsources work to third parties, it may lower the adviser\u2019s costs, but it does not change an adviser\u2019s core obligations to its clients. Thus, today\u2019s proposal specifies requirements for investment advisers designed to ensure that advisers\u2019 outsourcing is consistent with their obligations to clients.\u201d<\/p>\n\n\n\n<p>As demand for the asset management industry has grown and clients\u2019 needs have become more complex, many advisers have engaged third-party service providers to perform certain functions or services, many of which are necessary for an adviser to provide its advisory services in compliance with the Federal securities laws. These functions can include providing investment guidelines, portfolio management, models related to investment advice, indexes, or trading services or software. Outsourcing can benefit advisers and their clients, but clients could be significantly harmed when an adviser outsources a function or service without appropriate adviser oversight.<\/p>\n\n\n\n<p>The proposal would require advisers to satisfy specific due diligence elements before retaining a service provider that will perform certain advisory services or functions, and to subsequently carry out periodic monitoring of the service provider\u2019s performance. The rule would apply to advisers that outsource certain \u201ccovered functions,\u201d which include those services or functions that are necessary for providing advisory services in compliance with the Federal securities laws and that if not performed or performed negligently would result in material negative impact to clients.<\/p>\n\n\n\n<p>Additionally, the proposal would require advisers to conduct due diligence and monitoring for all third-party recordkeepers and obtain reasonable assurances that the recordkeepers will meet certain standards. Finally, the proposal would require advisers to maintain books and records related to the new rule\u2019s oversight obligations and to report census-type information about the service providers covered under the rule.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has proposed a new rule and rule amendments under the Investment Advisers Act of 1940 to prohibit registered investment advisers from outsourcing certain services and functions without conducting due diligence and monitoring of the [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-82991","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=82991"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82991\/revisions"}],"predecessor-version":[{"id":82992,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/82991\/revisions\/82992"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=82991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=82991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=82991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}