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Compliance & Risk Management

BRG provides specialized compliance advice for areas of high risk: valuation, investor and regulatory reporting, anti-money laundering, fund transition, and stress-testing compliance.

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Overview

BRG experts understand that clients have to navigate proposed, pending, and enacted laws, rules, and regulations and increased oversight. To effectively address this complex web, BRG has assembled former industry specialists including Fund and securities firm executives (CFOs, CCOs, COOs), risk management specialists, traders, government regulators (SEC, DOJ, FTC, OCC, PCAOB), fund administrators, Big Four partners, FBI agents, and other regulatory experts. Our practice qualifications include Ph.D. economists, technologists, CFAs, and CPAs.

Tailored Compliance Review Programs for High-Risk Areas
  • Trading, ethics, conflicts, expenses, valuation, marketing materials and personnel training
Regulatory and Compliance and Transparency Services
  • Investor disclosure, communications and transparency
    • Investor reporting and transparency best practices implementation
Valuation Policies and Procedures Compliance Services

Regulatory agencies, investors, and independent audit firms have called for alternative investment managers to adopt robust valuation policies and procedures (VPP) related to illiquid investments. BRG’s deep portfolio valuation and regulatory consulting experience provides a constantly refreshed view on fund VPP best practices that meet fair value, performance monitoring, portfolio reporting, and general compliance standards – both domestic and foreign

  • VPP Diagnostic Assessment - We identify material VPP gaps relative to the latest industry and LP standards and provide actionable recommendations. Our assessments are based on extensive experience working with funds to develop “best in class” VPP documentation
  • VPP Development and Remediation - We perform a VPP Diagnostic Assessment and then work alongside management either to develop a customized VPP document or to remediate material gaps in existing VPP documentation
  • BRG’s VPP Address Key Topics - While always adjusted to clients’ specific needs, key topics which are typically addressed in VPP documentation may include the following:
    • Governance
    • Process
    • Standards and guidance
    • Valuation methodology
    • Valuation drivers
    • Other considerations
End of Fund Life Risk Management and Planning
  • Transition Plan Compliance - The SEC is proposing a mandate to require all registered investment advisors to create a plan to deal with the transition of a fund’s assets during a major fund disruption including during a manager’s wind down. The SEC is focused on how a manager deals with the fund’s illiquid assets and the transfer of assets to a replacement manager.
  • Transition Plan Development and Compliance - We work with the manager to develop a feasible transition plan that incorporates a clear executable plan (laid out by function of the RIA) and the steps required (i) to either transfer the assets of the fund or (ii) to wind down the firm during a period when (a) the RIA is no longer able to serve its clients or (b) during a market stress event.
Annual Stress Test Development and Compliance
  • BRG assists the manager and the fund’s board develop, tailor, and implement the methodologies and procedures the manager and/or the fund is required to perform to meet its annual stress testing compliance.
  • BRG works with the registered investment advisor or the fund to conduct, review, document, and adjust its annual stress testing program under baseline, adverse, and severely adverse conditions.
  • Liquidity measurement and testing
    • BRG conducts evaluations of liquidity measurement and management processes.
    • Assessments of liquidity risk management processes and ability to meet/exceed regulatory requirements.
    • A BRG Liquidity Risk Review examines all aspects of the liquidity management process, including the contingency planning and stress-testing functions.
  • Trading and Credit Limit Testing and Evaluation
    • We work with managers, funds and broker dealers from a regulatory, supervisory and trader perspective on industry standards with respect to trading and credit guidelines and limits, both internally and between institutional counterparties.
Anti-Money Laundering Program Support
  • Adequacy of AML compliance policies and procedures review and independent testing of control procedures
  • Preparation of AML policies, procedures and control programs
  • Revisions to AML program for updated regulations and best practices
  • Provision of AML program staff training
Custody and Transactional Services
  • BRG has considerable expertise in matters pertaining to bank custody, trusteeship, collateral administration, and those related and often bundled roles wherein a bank is designated as an issuing and paying agent. Expertise within the above-mentioned areas include:
    • Bank operations performed by a custodian such as trade, settlement, safekeeping, corporate actions, reconciliations and other duties and responsibilities of an entity in its capacity as custodian per the transaction governing documents, market best practices, and compliance with regulatory prescriptions and recommendations including examination manuals.
    • Custodial and sub-custodial relationships including the selection process, due diligence, and ongoing monitoring of a custodian over a sub-custodian.
    • Trustee and Indenture Trustee duties and responsibilities, including fiduciary duties for mutual funds, structured credit securities, trust preferred securities, and other types of trusteeships.
    • Collateral administration for various types of corporate-action intensive instruments such as leveraged loans, mortgage loans, and interest rate and credit default swaps.
    • Fund administration duties and responsibilities within mutual funds, fund-of-funds, and other master and feeder fund structures including NAV calculations, portfolio concentrations and limitations, and asset eligibility.
    • Experience dealing with both “book entry” instruments (fully dematerialized) cleared and settled through central depositories (DTC, Euroclear, Clearstream), as well as physical over-the-counter (OTC) instruments and securities.
SEC Reporting
  • BRG has experience delivering cost efficient and effective regulatory and compliance services that are tailored to clients’ specific needs, particularly, SEC Compliance, Statutory Report Support, and Sarbanes-Oxley Implementation Support.
    • BRG experts have an in-depth understanding of financial reporting requirements based upon their experience at senior-levels working at the SEC.
  • BRG assists clients in preparing for an SEC audit, including staff augmentation, coordination with external auditors and an opportunity to perform a “dry run” of the audit.
    • BRG assists clients with accounting and audit support, merger and acquisition due diligence and revenue recognition.
US and IFRS Financial Reporting
  • BRG professionals have extensive experience with audit and accounting standards issued by US regulators and various standard setters such as the SEC, the National Association of Insurance Commissioners (NAIC), the Financial Accounting Standards Board (FASB), the International Accounting Standards Board (IASB), the Public Company Accounting Oversight Board (PCAOB), and the American Institute of Certified Public Accountants (AICPA).
  • Our experts provide accounting and disclosure expertise, investigative services, other advisory services, and testimony related to U.S. GAAP, U.S. GAAS, SEC rules and staff accounting bulletins, International Financial Reporting Standards (IFRS), and insurance Statutory Accounting Practices (SAP).
Offshore Funds and Special Purposes Entities
  • BRG experts have audited, managed, and provided consulting services related to offshore funds and special purpose entities.
  • Our experts have worked and opined on a wide array of issues associated with offshore funds and special purpose entities including on matters relating to accounting, reporting, and investment strategy appropriateness.

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