Intermediaries Asking For Increased Information Around Operational Functions

Oct 12, 2016

Alma Piscitello, SVP and Head of Strategic Relationships for Northern Lights Distributors, LLC (NLD) was quoted in the recent Fund Operations article, “Intermediaries Asking For Increased Information Around Operational Functions”.

“As mutual fund companies continue to adopt a more stringent culture of compliance, they must be prepared to make full disclosures not only to their shareholders, but their intermediaries as well.

The current compliance environment and regulatory pressures coming from the SEC has caused intermediaries to seek in depth responses to their due diligence questionnaires. These questionnaires are not new, as many third-party providers have historically asked managers to fill them out before entering into a contract. But in today’s environment, assessing a company’s operational and compliance risk has grown even more important.

“We’re seeing a little bit of this now, but going forward, more fund companies will be asked to define their risk management policies and procedures around disaster recovery, which also is about people and succession planning. Intermediaries are saying ‘Tell me the controls and policies you have in place to implement the DOL [Fiduciary] Rule’ for example. They want to know what is being done to mitigate errors, stop errors from happening and be able to document all of that,” said Alma Piscitello, Senior V.P. at Northern Lights Distributors.

Northern Lights recently issued guidance for their asset manager clients on best practices when it comes to responding to due diligence questionnaires. As part of a response plan, fund companies are more often expected to have an understanding of how their company’s infrastructure operates front to back.

To read more about the information intermediaries are requesting, click here.

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