ECI hires compliance specialist

The UK-based mid-market firm has recruited a compliance manager to help meet regulatory demands that not every GP is necessarily prepared for, PE Manager has exclusively learned.

ECI Partners has created a compliance manager role as a way of addressing increasing compliance burdens for private equity firms, PE Manager has exclusively learned. 

Charlene Fletcher, formerly a compliance manager with financial services group Close Brothers, started the position Monday, which will involve her working three days a week alongside ECI chief financial officer Philip Shuttleworth.

Shuttleworth said the volume of regulations and compliance requirements which have come to a head all at once were the primary drivers behind creating the new role. 

Shuttleworth noted in particular the Alternative Investment Fund Managers (AIFM) directive, the UK's market watchdog, the Financial Services Authority, transforming into the Financial Conduct Authority (FCA) and the US’ Foreign Account Tax Compliance Act as the firm's top regulatory challenges. 

“The regulatory landscape has fundamentally changed,” elaborated Shuttleworth. “I think the obligations on businesses like ours have increased dramatically, and the impact of getting it wrong has increased at a time when the market is incredibly competitive, both on dealmaking and fundraising.”

Not every GP may realize it, but the transition to the FCA is quite a major shift for the industry, said Shuttleworth. He said that a greater focus on supervision, as well as prevention, from the FCA will result in more intervention and an increased dialogue between regulators and the industry. 

“I think there will be a shift towards more preemptive action where if there is a suspicion that something is not right, or clients might be at risk, the FCA will go in and do more thematic work on firms.” 

The hire of Fletcher will also help the firm meet AIFM compliance, Shuttleworth noted, adding the directive's depositary obligations have proven to be one of the greater challenges in obtaining a pan-EU marketing passport. 

“We are working hard with one depositary to make sense of the AIFM text to make sure we understand how this will work in practice. This requires a lot of thought and effort to make sure a workable interpretation of the rules, which don’t provide full clarity, is in place,” said Shuttleworth.