From Ocorian

• Two-thirds of alternative fund managers have been hit by governance-related fines or sanctions over the past two years
• Ocorian offers tailored board evaluation services to help firms strengthen governance and meet evolving regulatory demands

New research* from Bovill Newgate and Ocorian has found that 65% of alternative fund managers have been subject to governance-related fines or sanctions within the last two years, despite many firms claiming to have strong governance practices. The study, which surveyed over 100 senior executives and compliance professionals working for alternative fund managers, found that 90% of respondents expect their focus on governance to increase significantly over the next two years, with nearly a third anticipating a dramatic rise in attention.

While most fund managers acknowledge the importance of governance, with 93% stating that their board has the right blend of skills, the research highlights the increasing pressure to improve governance frameworks, particularly in the face of evolving regulatory requirements.

Ocorian, a global leader in corporate services, is addressing this growing need with its director services – providing experience directors and governance experts and partners with Bovill Newgate whose board evaluation expertise combines to help firms assess and enhance the effectiveness of their governance structures, ensuring compliance and long-term stability.

Paul Ford, Head of Regulatory and Governance at Bovill Newgate, commented: “Regulators hold the board responsible for effective compliance with the regulatory framework.  The board must demonstrate integrity and sound judgment, especially in today’s increasingly stringent regulatory environment. The board also must organise and control the firm effectively, including establishing and maintaining appropriate and effective policies, procedures and controls which includes appropriate and effective governance frameworks for decision making. Despite many firms claiming they are good at governance, they are still seeking additional support as regulations evolve, and this is where Bovill Newgate’s board evaluation services and consultancy expertise can make a crucial difference.”

The findings from the study underscore the importance of continuous improvement in governance practices. Ocorian’s board evaluation services provide comprehensive reviews of board effectiveness, offering tailored solutions that align with each firm’s specific regulatory obligations. There is also the added option of appointing independent board directors to ensure diversity at Board-level in alignment with regulator expectations. Ocorian supports firms in ensuring their governance structures are both robust and adaptable.

Paul Ford added: “As regulatory demands continue to become more complex, particularly for firms operating across multiple jurisdictions, governance frameworks need to be stronger than ever. We often recommend a three lines of defence approach, which includes implementing robust procedures and policies, rigorous monitoring, and independent reviews. This strategy not only helps businesses protect themselves but also provides assurance to regulators that governance is being taken seriously. We also offer consultancy expertise in relation to the appropriateness and effectiveness of both the governance framework and the related CMP controls to test effectiveness.”

Ocorian’s three lines of defence approach to tackle risk and compliance challenges:

• Line one: create clear and robust frontline processes and procedures, supplementing this with both online and face to face training programmes for staff.
• Line two: build and empower a comprehensive compliance oversight function which monitors and assesses the processes and procedures, as well as advising and supporting staff and senior managers to comply with the firm’s obligations.
• Line three: seek review and challenge of the firms AML framework via annual independent audits.

About Bovill Newgate, an Ocorian company 

Bovill-Newgate is an Ocorian company and specialist financial services regulatory consultancy with a global offering across the UK, the Channel Islands, Singapore, Hong Kong, Mauritius, and the Americas. The firm helps its clients meet complex and evolving regulatory obligations, providing certainty and peace of mind. Its clients are firms of every size across the financial services sector. Bovill Newgate supports its clients in managing regulatory change and dealing with regulatory scrutiny. Providing advice on regulatory change and preventing financial crime, applications to regulators, building or enhancing regulatory frameworks, conducting compliance investigations or diagnostics, training and fulfilling prescribed roles Bovill Newgate have experts based across all the world’s key financial centres who operate globally, acting as one team. 

ENDS

Notes

Please note that this press release is intended to provide a very general overview of the matters to which it relates and is provided for your convenience. It is not intended as legal or investment advice and should not be relied on as such.

*Bovill Newgate and Ocorian commissioned independent research company PureProfile to conduct a global study (across the US, UK, Germany, Brazil, Singapore, Hong Kong, UAE, Turkey, Quatar, Saudi Arabia and Mauritius) of 101 senior executives, regulation and compliance executives working at alternative fund manager firms (including private equity, venture capital, real estate, infrastructure, private debt, renewables and hedge funds) during January 2024.