As regulatory expectations evolve, the SEC and CFTC are placing increased scrutiny on how private fund managers operate—not just what they report. Platform strength is now as important as performance.
1. Valuation Governance & Process Integrity
Valuation remains a central focus, particularly for funds holding illiquid or complex assets. Regulators are assessing:
- Clearly documented and approved valuation policies
- Consistent application of pricing methodologies
- Active valuation committee oversight with recorded minutes
- Robust support for material valuation judgments
- Alignment between offering documents and actual practices
2. Marketing Rule Compliance & Performance Oversight
The SEC’s marketing rule continues to reshape communication. Key areas under review:
- Consistency between marketing materials and reported returns
- Substantiation of hypothetical or back-tested performance
- Transparency in assumptions, risks, and disclosures
- Oversight of third-party marketing communications
3. Reporting Discipline: The Signal of Institutional Readiness
Operational maturity is measured by quality and consistency. Focus areas include:
- Timeliness of monthly and quarterly reporting cycles
- Documentation supporting reconciliations
- Oversight of fund administrators and service providers
- Audit readiness and organization of supporting materials
4. AML, Cybersecurity & Operational Resilience
High-priority areas for globally structured funds. Examiners review:
- Active enforcement of current AML policies
- Investor onboarding and due diligence documentation
- Ongoing monitoring and escalation procedures
- Cybersecurity risk assessments and controls
- Business continuity and incident response plans
