Hedgeweek Webinar: What’s in Store for ’24
On November 30, 2023, Hedgeweek hosted a webinar sponsored by Hazeltree on “What’s in Store for ‘24”. Will Wainewright, Head of Hedge Fund Research for Hedgeweek served as moderator with a panel including:
- Jennifer Han, Head of Regulatory Affairs at MFA
- Tom Kennedy, COO/CCO of Opti Capital and
- Joseph Spiro, Director of Product Management at Hazeltree
The focus of the webinar was to explore insights on the new SEC rules governing transparency and reporting:
- Preparing for T+1 – from compliance to record-keeping obligations
- How to address an increasingly complex network of counterparties
- Futureproofing through operational efficiency and risk management
According to Jennifer Han, Head of Regulatory Affairs at MFA, “the regulatory environment for hedge funds is in flux as MFA and other industry organizations seek to challenge new SEC private fund advisor rules on the grounds that private funds aren’t subject to SEC oversight. If these appeals fail, hedge funds need to prepare for more frequent reporting and a higher level of transparency to all their activities.”
Tom Kennedy further reinforced, “There’s a lot for hedge fund COOs and CCOs to consider for the coming year including the new rules like those pertaining to side letters which will force funds into a delicate balancing act between being compliant and honoring confidentiality.” A lot of funds are looking to outsource compliance processes but, according to Kennedy, “Outsourcing risk is not a thing”. It remains the responsibility of the manager to ensure third parties are meeting obligations. “You don’t just set it and forget it”, Kennedy stated.
Kennedy emphasized the need for strong, automated internal processes. Citing his experience in 2008 as an example of what happens in a crisis, he said, “When you lose a significant amount of money, the last thing you can think about is process and reporting obligations.”
Joe Spiro elaborated on the importance of automated processes saying, “Any process that relies on someone remembering to do something is doomed to fail. Automation is critical to survival”. According to Spiro, this is especially true as the number of counterparties increases. “The days of doing business with a small number of counterparties are over”. When asked how firms could manage multiple entities, Spiro stated, “It’s critical to have all the data in one place so you can normalize it and compare terms because the terminology across contracts can differ quite a bit”. He also asserted the importance of automating the movement of assets to relieve operational burdens and get asset managers back to their true mission which is managing money.
To view a recording of the webinar, go to https://live.hedgeweek.com/Whats-in-store-for-24