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    Oct. 9, 2025

Behind the NSCP’s Proposal of an SEC Compliance Advisory Committee

On August 21, 2025, the National Society of Compliance Professionals (NSCP) sent the SEC a letter proposing the creation of a compliance advisory committee (Committee) that would “provide expert guidance and recommendations to the SEC on compliance-related issues affecting broker-dealers, investment advisers and other similar regulated entities.” The idea is that the Committee would “serve as a conduit for industry perspectives, identifying practical solutions to enhance compliance processes, mitigate risks and address regulatory priorities.” The Hedge Fund Law Report spoke to Lisa Crossley, the NSCP’s executive director and CEO, about the proposed committee framework (Proposal), which was also endorsed by the Investment Advisers Association, Financial Services Institute and Insured Retirement Institute. This article summarizes the Proposal and shares Crossley’s thoughts on why the NSCP issued the Proposal; how it envisions the Committee working; ways the Committee could benefit the SEC and industry stakeholders; and the likelihood the SEC will consider creating the Committee. For more insights from Crossley, see “Personal Liability and Compliance Resourcing Are Top Concerns Among CCOs, Surveys Show” (Jan. 13, 2022).

Does the U.K.’s New Carried Interest Tax Regime Bring Clarity for Hedge Funds?

Carried interest, or “carry,” is market standard within the private equity industry, enabling investment professionals to share in the “super profits” of an investment fund, if and when, there are any. Within hedge funds, carry often pays out in the form of “performance fees,” which work on a similar basis as carry in the PE context and align managers’ interests with those of investors. On July 21, 2025, the U.K. government published draft legislation on new carried interest tax rules (Rules), which will take effect as of April 6, 2026. Although the publication of the Rules provided no material changes from what had previously been announced on June 5, 2025, there were a number of welcome clarifications to the Rules that will further ease anxiety among the hedge fund industry. It is not expected that the final legislation, introduced by the Finance Bill 2026, will be materially different to the Rules as currently drafted. This guest article by Ellie Avni and Lewin Higgins-Green from FTI Consulting explains the motivation for the Rules, summarizes the key changes embodied in them and notes the implications for hedge fund managers. For a look at U.S. tax law in this area, see this two-part series “An Examination of the Final Carried Interest Regulations”: Part One (Feb. 4, 2021); and Part Two (Feb. 11, 2021).

CFTC Enforcement Sprint Yields Resolutions With 10 Firms

One of acting CFTC Chair Caroline Pham’s early initiatives as agency head was compiling a list of all open enforcement matters and investigations concerning compliance issues that did not involve customer harm or market abuse. On March 11, 2025, she announced a 30‑day compliance and remediation “enforcement sprint initiative” (Initiative) in which the CFTC would seek to resolve those matters expeditiously to conserve CFTC resources and free Division of Enforcement (Division) staff “to pursue fraudsters and scammers and seek recoveries for victims, whether through disgorgement, restitution, or other measures.” On September 4, 2025, the CFTC announced six settled enforcement proceedings under the Initiative, involving 10 respondents (Respondents), most of which received credit for exemplary cooperation and/or exemplary self-reporting in line with the Division’s February 25, 2025, Advisory on Self-Reporting, Cooperation and Remediation. There were three matters involving electronic communications recordkeeping, two involving system configuration errors and one involving inaccurate reporting. The Respondents agreed to pay, in total, nearly $8.4 million in civil penalties. This article examines the six resolutions. See “Acting SEC and CFTC Chairs Emphasize Getting ‘Back to the Basics’” (May 8, 2025); and “CFTC Advisory on Self-Reporting, Cooperation and Remediation Overhauls Years of Guidance” (Mar. 27, 2025).

New Equity Fund Managers Offered Lower Fees and Better Liquidity Terms in 2024, Study Finds

In a challenging fundraising environment, new hedge funds focused on equities, on average, charged lower management fees in 2024 than those launched in 2023, Seward & Kissel LLP found in its study of new manager hedge fund launches in 2024, released in May 2025. Additionally, a smaller proportion of funds imposed lock-ups or investor-level gates. On the other hand, the average fee charged by new non-equity funds was higher year-over-year, as was the proportion of funds with lock-ups or investor-level gates. The study also examined founders share classes, fund structures, minimum investments and seeding. This article distills the study’s findings, with additional commentary from Nicholas R. Miller, partner at Seward & Kissel and lead author of the study. For Seward & Kissel’s last new manager study, see “New Hedge Funds: Short‑Term Challenges Create Long‑Term Views” (Jun. 6, 2024).

Six Steps to Address the SEC’s Trump Era Cyber Enforcement Priorities

The SEC has vowed that its cyber police will still patrol the markets during President Trump’s second administration. On February 20, 2025, the regulator announced the creation within the Division of Enforcement of the Cyber and Emerging Technologies Unit (CETU), which replaces the Crypto Assets and Cyber Unit and will have seven new priorities. Following the announcement, CETU seems to have handed fresh white hats to its attorneys and fraud specialists. Their mission is “to protect retail investors from bad actors in the emerging technologies space” and “to focus on combatting cyber-related misconduct,” the SEC declared. Fraud enabled by artificial intelligence (AI) and machine learning tops the priorities list. Giving AI the lead billing fits the current technology moment, observed Debevoise partner Erez Liebermann. Deepfakes and other AI deceptions have turbocharged investment scams. “There is a tremendous ability now with AI to generate messages to mislead investors,” including in connection with schemes to cause investors to pump and dump stocks, he said. This article discusses cyber and AI securities enforcement on the horizon and distills six steps that firms can consider to prepare for CETU’s new priorities, with insights from SEC enforcement specialists at A&O Shearman, Davis Polk, Debevoise, Katz Banks Kumin and Morrison & Foerster. See “SEC 2025 Exam Priorities Stress Core Fiduciary Duties and Effective Compliance Programs” (Dec. 5, 2024).

Proskauer Adds Regulatory Attorney Anna Maleva‑Otto to London Office

Anna Maleva-Otto has joined Proskauer as a regulatory partner in the firm’s private funds group. Based in the London office, her practice spans the full lifecycle of U.K. Financial Conduct Authority-regulated businesses. She regularly advises investment managers focused on public markets, including those managing hybrid strategies that combine private investments and liquid securities. For insights from Maleva-Otto, see our two-part series “Navigating FCA and SEC Cybersecurity Expectations”: Part One (Jan. 7, 2016); and Part Two (Jan. 14, 2016).

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Women to Watch: Contributions, Achievements and Observations of Outstanding Female Professionals

To mark International Women’s Day, women editors and reporters at ION Analytics interviewed outstanding women in the industries and jurisdictions we cover. In this part, Law Report Group editors Jill Abitbol, Robin L. Barton and Megan Zwiebel profile notable women in data privacy, cybersecurity, private funds and anti-corruption law, including Anne-Gabrielle Haie, Jessica Lee, Micaela McMurrough, Laura Perkins, Amanda Raad, Madelyn Calabrese, Ranah Esmaili and Genna Garver. Enjoy reading their inspiring remarks here.