Code of Ethics for Private Fund Advisers: Ensuring Compliance to Protect your Firm
FREE Webinar:
Tuesday, May 6, 2014
1:00 PM - 2:30 PM (ET)
Code of Ethics for Private Fund Advisers; Ensuring Compliance to Protect Your Firm
This webinar will:
- Explore the requirements and regulatory expectations imposed on advisers under the Code of Ethics Rule
- Highlight some of the most common code deficiencies found during SEC examinations
- Discuss tried and true methodologies for meeting your fiduciary responsibilities.
When investment advisory personnel invest for their own accounts, significant conflicts can arise between the employee’s interests and those of the adviser’s clients. Among the potential problems is an employee frontrunning client trades, i.e., personally benefiting from the market effect of trades placed in client accounts, or trading on the basis of inside information in their personal accounts. Of course, it’s no secret that insider trading has been a hot topic with the SEC of late. After peaking at 61 cases in 2008, the number of insider trading-related cases brought by the Commission has steadily risen year-over-year from 37 in 2009 to 58 in 2012. And new insider trading headlines seem to be appearing with increased frequency in the financial and mainstream media.
Section 204A of the Advisers Act requires advisers to maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information by the adviser or its associated persons. In 2004, the SEC adopted Rule 204A-1, the Code of Ethics Rule, under this section of the Act. In addition to requiring the adoption of a code of ethics, Rule 204A-1 requires that firms monitor the personal trading activities of certain supervised persons to identify improper trades or patterns of trading by those persons, including, but not limited to, insider trading.