North American hedge funds and asset managers are seeing an uptick in regulatory pressure, and cost. For years, old technologies, siloed data structures, outsourced supervision, and seldomly updated policies and procedures were overlooked when complying with trade supervision rules.
In all fairness, this was typically sufficient and often passed the test when it came to avoiding regulatory scrutiny from governing bodies such as the Securities and Exchange Commission (SEC). However, the landscape has changed in recent years, evidenced by the fact that SEC fines were at an all-time high in 2022.
Abusive trading practices, such as insider trading, market manipulation, and cherry-picking, "corrode trust in our markets." This is the SEC's view and why the agency took a hard line on these offenses in 2022 and will continue to do so looking forward.
