Kinetic Partners has expanded the regulatory and compliance team at its New York office to meet increasing demand from hedge funds undergoing Securities and Exchange Commission registration required under the Dodd-Frank Act.
Donald Babbitt and Kevin Duffy Jr., have joined the firms regulatory and compliance practice, which is experiencing significant growth because of fund managers taking steps to be fully compliant with the SEC registration process. Yesterday the SEC announced final rules and extended the registration deadline to March 30.
We are extremely fortunate to have Donald and Kevin join our growing regulatory and compliance practice, says Julian Korek, founding member at Kinetic Partners. Both have proven track records in the regulatory and compliance areas, and will play vital roles in helping our hedge fund clients prepare for the new requirements resulting from SEC registration.
Babbitt joins Kinetic Partners from Prometheus Capital Partners where he was managing director. Earlier, he worked as an adviser in financial operations and compliance in the private equity and investment and merchant banking sectors. He was also a senior attorney at the SEC in Washington, D.C.
Duffy joins the firm from NYPPEX Holdings, LLC, a Connecticut investment firm, where he served as general counsel. Before that, he served at New York-based law firm Duffy & Staab, where he specialized in compliance and regulatory matters. Duffy also served as a senior attorney at the SECs New York office.
Kinetic Partners regulation and compliance team has actively been working with hedge funds to prepare for registration with the SEC. The deadline extension will provide more time for a large portion of the industry that has just begun the lengthy registration process.
The additional time to complete the process comes as a much needed reprieve for a large segment of the hedge fund industry, says Jonathan Saxton, director of global risk and compliance at Kinetic Partners. However, we would warn those managers who are not prepared to resist viewing this deadline extension as an opportunity to delay any further.
For managers who have begun the registration process, common weaknesses in compliance policies include the implementation of off-the-shelf compliance policies and procedures that are ill-suited to their business, a general lack of documentation supporting compliance controls or policies, and less than robust controls and conflict management.
A significant number of fund managers with $3 billion in AuM or underwhich is a group that comprises small- and mid-tier fundsare trailing their larger counterparts in preparing for their SEC registration. According to the firms estimates, only about 40% of small fund managers ($300 million AuM or less) have begun the process, compared with roughly 85% of the mid-tier fund managers ($300 million to $3 billion AuM).
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