Firm Happy to Help Hedge Funds Comply
By Susan L. Barreto
Originally published by HedgeWorld.com
Editorial Note: Founded in June of 2004, EOS Compliance Services, LLC was succeeded by ALARIC Compliance Services, LLC in January 2006.
Newly formed firm EOS Compliance Services got its start last June helping registered investment advisers and registered investment companies meet the changing requirements of the Securities and Exchange Commission.
“…the current requirements including antifraud provisions are only a fraction of what the new rule entails.” Guy F. Talarico, Founder and CEO of Alaric Compliance.
What the firm’s founders discovered was that hedge funds were eager for help. Guy F. Talarico, co-chief executive of the firm, said EOS has begun to work with hedge funds, including a US$3 billion fund of funds, which he would not name, $2.2 billion of which is in hedge funds.
“The hedge fund managers have fiduciary responsibilities, the current requirements including antifraud provisions are only a fraction of what the new rule entails,” Mr. Talarico said. “Some of the major distinctions a hedge fund adviser needs to focus upon are the security valuation policies and monitoring compliance with investment guidelines.”
He believes that a number of compliance firms will jump on the hedge fund bandwagon, but few will be equipped to handle the needs of funds of funds and hedge funds. Mr. Talarico has identified 50 steps a hedge fund adviser needs to follow upon registering, ranging from advertising to email-compliance and archiving issues.
Before spending almost 20 years in financial services with various companies such as Investors Bank & Trust developing regulatory compliance measures, Mr. Talarico served three terms in the New Jersey State Assembly, where he sponsored numerous laws, including regulatory reform measures in the insurance and banking industries.
Mr. Talarico suggests that hedge fund managers put the next year to good use and prepare for SEC registration rather than putting it off until the last minute. His company is selling a customized approach rather than a guidebook or a generic checklist.
EOS reviews the hedge fund firm’s processes and aligns them with chief principal program components for registered investment advisers. The handling of these components may vary depending on what additional trading policies and procedures a firm may need to adopt to become compliant.
All told, hedge fund advisers need to assess the requirements of the new rule. According to Mr. Talarico, his firm is now working with 10 clients with combined assets under management of US$15 billion. The registered investment advisers in that group rely on EOS as a chief compliance officer and in some cases offer hedge funds in addition to long-only portfolios.
Director of Marketing
Alaric Compliance Services, LLC