Data Action Layer February 22, 2024
After coming under a high level of scrutiny, a federal appeals court vacated the SEC’s Private Fund Advisor Rules. While the SEC determines their next steps, forward-thinking firms can stay ahead of any future regulations by leveraging technology to optimize their manual data processing and reporting workflows. Firms that are able to extract, store and report on this information quickly will be able to adapt to and stay ahead of regulatory changes without increasing their operational costs.
In August 2023, the SEC announced new regulations for private markets, part of a trend of greater transparency requirements for private equity firms. With the compliance transition window well underway, if you haven’t already taken a closer look at your firm’s operations process, the time to start is now.
Among other new regulations, the new Quarterly Statements Rule accelerates reporting requirements for firms, requiring advisers to distribute quarterly statements to investors that disclose fund-related information such as performance, investment costs, and fees and expenses, within 45 days of the end of each quarter and 90 days after the end of each fiscal year (with an additional 30 days, respectively, for funds of funds). Additionally, private fund advisers are required to obtain annual audits of all the private funds they directly or indirectly advise.
In order to meet these new requirements and timelines, you’ll need to be able to capture the required data from your files and systems accurately and efficiently. This shift will be an operational challenge for many firms, requiring them to transform their record-to-report workflows.
With the T+1 settlement transition affecting the buy-side in 2024 as well, firms need to seriously consider opportunities for increasing operational efficiency and automating previously manual processes across their front, middle and back offices. Keeping your operations process as is, particularly if it involves manual data processing, has become an unsustainable option.
Introducing technology that can automate your workflows will allow you to expand your back office capabilities and meet reporting requirements without devoting hundreds of hours of your team’s time to manual data extraction. Not only will you be able to report on your data quickly and accurately, even from unstructured documents, you’ll be able to trace any extracted data back to its source.
Without an operations overhaul and automated workflows that can scale with your business, meeting these new regulations will be an insurmountable obstacle for many firms.
Alkymi helps firms capture verified data from even the most complex documents, with custom machine learning models trained exactly to their specifications. Traceability and auditability is guaranteed. Schedule a demo of our platform to learn how Alkymi can prepare you for the new private fund regulations and optimize your operations across your business.
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