A trio of new regulations will leave UK private fund compliance officers with a heavy workload in 2018, according to HarbourVest’s vice-president legal and compliance officer.
Nick du Cros said there is a lot happening on the regulatory front, including the second Markets in Financial Instruments Directive, the Senior Managers and Certification Regime, and new fee transparency requirements.
“[Compliance with] MiFID II by the end of the year is one [task we face], and we are actively working on that. However, next year, we’ll have work to be done with the SMCR,” he said.
The SMCR is designed to ensure clear lines of accountability within regulated firms and requires each senior manager to have clearly defined responsibilities. It is expected to apply to private equity firms from March 2018.
“What I hear is that while the SMCR regulation has good intentions, there are practical issues for smaller firms with allocating responsibilities among their senior managers,” du Cros said.
A third policy on transparency of fees and expenses charged by managers in the UK is in the initial stages, but du Cros said an early consultation is likely.
“Their timeline is going to be far more challenging. Possibly, as early as late this year, we may see some draft documentation for the industry to consider,” he said.
“The smart way to go about this is to get a firm’s experts talking and liaising with the key stakeholders (both internally and externally) to get a head start. Practically, you need to start with available preliminary information, well before final guidance is published.”