The US regulation and enforcement status quo is likely to remain in place, at least short term, according to former Securities and Exchange Commission director of enforcement, Stephen Cohen.
“Any substantial changes to Dodd-Frank will take a long time to implement, possibly as long as three years, so managers will need to be patient,” Cohen told pfm.
“Sometimes when a new Chair begins their work, their outlook on things can change. The incoming chair is a very well known, capable corporate lawyer, but may take his time to get up to speed on issues affecting certain industries, including private equity,” he added.
Cohen, who joined law firm Sidley Austin as a partner this week, was muted on the possibility of changes to the SEC’s exam priorities and private equity specific regulation.
He said the acting director of the exam program, Pete Driscoll, is well respected, and managers shouldn’t be concerned about 2017 exam priorities changing. But there could be changes in course for the following year.
“I’d be surprised if Congress moves to get rid of the need for private fund advisors to register. Investors have come to rely on that, so I doubt any radical changes of that type are afoot, but we’ll have to wait and see. However, there may be some changes such as filing and form requirement changes. Again, it remains to be seen,” he added.
And cybersecurity will remain a major priority, he said, pointing to the increase in staffing in the area over the past year.
“It’s something of a brave new world, but the SEC has been trying to be transparent with registrants on this and provide guidance,” he said.
Cohen added the recent spate of high-profile departures is typical of administration changes.
“Mary Jo White had appointed her own personnel at the start of her tenure, so it was quite usual for some of them to cycle out around the same time as her,” he said.