Photo Credit: RachJose
Understanding the current requirements of the Dodd Frank Act is challenging, but anticipating the future requirements of Dodd-Frank is causing hedge funds of all sizes to make new investments in people, technology, and service providers! Two hundred regulations aren't fully written, and ongoing test results by regulators aren't available.
Hedge fund principals at smaller firms report the stress and financial strain of making additional investments in systems that generate reports on demand. Valuation of the firm's assets under management, and how the firm would liquidate investors' assets when asked to do so, concern SEC examiners.
A relatively new industry of third-party service providers is helping hedge funds maintain the known requirements of Dodd Frank while predicting its new components.
That said, there's no getting around the need to hire professionals for most firms in 2011. This is Wall Street reform in progress.
Technology, compliance, operations, and clearing professionals: All Aboard!