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News October 4, 2004 Issue

Investment Adviser Task Force Redux

Remember how Division of Investment Management director Paul Roye announced at the hedge fund open meeting that a group of senior SEC staff was working on factors to identify high risk advisers for cause examinations (IM Insight, July 16, 2004)?

The group now apparently has a name: the Investment Adviser Task Force.

Former division deputy director Cynthia Fornelli used the term last month when describing the SECís new risk-based focus in a speech at a hedge funds conference. She explained that Chairman William Donaldson established the "Investment Adviser Task Force" to examine more proactive and focused methods to oversee advisers.

"Given the astounding growth of the investment management and hedge fund industries, the Commission is acting to create a new risk-based method of focusing all of our resources to better achieve an efficient approach to our surveillance and enforcement responsibilities," she said. "The techniques we are developing will put new hedge fund manager oversight responsibilities at the forefront of our enhanced approach to oversight for all investment advisers." She also noted that SEC staff "is actively reviewing the role of technology as a regulatory tool to enhance the Commissionís effectiveness as a market overseer."

Donít get the new group confused with the Investment Adviser Task Force created by then-Chairman Arthur Levitt following NSMIA. That group was part of the SECís Division of Investment Management. It eventually became the SECís Office of Investment Adviser Regulation.