Executives of asset managers, alternatives firms and broker-dealers fear their firms’ regulatory and cybersecurity practices wouldn’t pass regulatory scrutiny.
According to Cipperman Compliance Services’ fourth annual C-Suite Survey, which polled more than 200 executives (CEOs, CFOs, CCOs and general counsel), 43% of hedge funds and private equity managers, along with 32% of broker-dealers and 25% of asset managers had such fears.
The firm sizes in asset under management were:
Less than $500 million: 25%;
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$500 million to $1 billion: 28%;
$1 billion to $5 billion: 28%; and
Over $5 billion: 19%.
The poll found that executives had these concerns even as they devote more time to regulatory compliance. Sixty-one percent of respondents view compliance as a part of doing business, such as meeting regulatory requirements or attracting and retaining clients, up from 43% in 2016.
“These results should be a loud wake-up call to the industry regarding how they’re approaching compliance and exam preparation,” said Todd Cipperman, founding principal of Cipperman, in a statement. “The regulatory pressures from the SEC, FINRA, and large clients require a more professional approach than dual-hatting a busy executive or hiring or appointing an overwhelmed internal compliance officer.”