SEC Division Of Examinations Announces Its Examination Priorities For 2021 – Finance and Banking


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SEC Division Of Examinations Announces Its Examination Priorities For 2021


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On March 3, 2021, the SEC’s Division of Examinations announced its examination priorities for 2021. Compared to
last year, this year’s edition contains an expanded section
specifically addressed to private funds. For private fund managers,
the exam staff states that it will target a list of issues,
including:

  • Preferential treatment of certain investors by advisers to
    private funds that have experienced issues with liquidity,
    including imposing gates or suspensions on fund withdrawals;

  • Portfolio valuations and the resulting impact on management
    fees;

  • Adequacy of disclosure and compliance relating to cross trades,
    principal investments, or distressed sales;

  • Conflicts around liquidity, such as adviser led fund
    restructurings or stapled secondary transactions;

  • Risks surrounding non-performing loans and defaults for funds
    that have a higher concentration of structured products, such as
    collateralized loan obligations and mortgage backed
    securities;

  • The impact of recent economic conditions on portfolio companies
    owned by private funds (e.g., real estate related
    investments).

Read the full alert here.

SEC Division Of Examinations Announces Its
Examination Priorities For 2021

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