With the deadline for hedge funds to adopt the Securities and Exchange Commission’s recordkeeping directives one month away, the alternative funds have increasingly been looking for software to ease the transition.
LiveOffice Corporation, which specializes in Internet-based compliance software, reported a record growth in the number of hedge funds adopting its AdvisorMail HF email archiving and compliance solution.
The company’s fourth quarter results reveal a 70% increase in the number of hedge funds using AdvisorMail HF to meet the SEC electronic recordkeeping requirements surrounding email and instant message (IM) records. LiveOffice attributes the heightened demand for AdvisorMail HF to the high number of fund firms preparing to register with the Securities and Exchange Commission under Rule 203(b)(3)-2, which requires hedge funds to submit Form ADV by February 1.
As part of the registration process, hedge fund firms are required to archive emails and IMs in a tamper-proof format. In addition, the SEC has indicated that it does have the right to inspect any electronic record, such as email, whether it is relevant to a trade or not.
The LiveOffice system is able to electronically monitor, store and retrieve all inbound and outbound emails, saving compliance personnel hours of time by automating the entire review and random sampling process. The price for the software begins at approximately $200 per month.