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January 21, 2020

Following the SEC’s statement on LIBOR transition, some investment advisers are offering up disclosures on the topic. But are mere disclosures sufficient? To find out, RFG invited Adam Schneider and Serge Gwynne, partners at Oliver Wyman, to advise members of the RFG consortium on issues faced by GPs. Schneider and Gwynne commented on three major risks that should be addressed, plus a significant opportunity. 


By way of background, LIBOR is almost ubiquitous, with notional amounts of LIBOR-based loans totaling about $240 trillion, and has been called “The World’s Most Important Number.” But this will soon end: in 2017 Andrew Bailey, CEO of the UK Financial Conduct Authority, announced it would stop supporting LIBOR after 2021, and LIBOR is likely to end at that time. Asset managers will have t...

January 13, 2020

In last week's RFG Weekly Roundup™, consortium members were alerted to a new EU tax anti-avoidance disclosure regime which is broad enough to potentially apply to U.S. nonprofit organizations. The article's analysis provides three steps for navigating the new rules. For more information about RFG's services, write to Information@RegFG.com.

December 16, 2019

At RFG’s Fall 2019 Meeting in Boston, several members expressed a desire to know more about CFIUS. Some investment offices are concerned that CFIUS may change the rules of the road and chill potential acquisitions (whether in technology, life sciences or other areas), especially for those who have investment capital from China. RFG is beginning to dig in on these issues. Doing so is particularly timely, as recent regulations have expanded CFIUS jurisdiction. 

CFIUS Basics. The U.S. tempers its “open policy” towards foreign investment with regulatory oversight through CFIUS, the interagency Committee on Foreign Investment in the United States. CFIUS’ authority derives from the U.S. president, who has statutory authority under 50 U.S.C. 4565, and broad discretion, to block or unwind any transaction that “t...

November 18, 2019

Over the past year, investment activities at endowments have faced increasing public scrutiny in what can only be described as a highly politicized environment. At the same time, federal enforcement personnel have repeatedly warned that criminal charges will be harsher, and more likely to be brought, in cases where an organization lacks a comprehensive, continuously improving compliance program that is audited to assure its effectiveness. In the face of these requirements, The Regulatory Fundamentals Group LLC (RFG) surveyed internal audit teams at charitable organizations with endowments larger than $1 billion to understand how they tackled endowment audits. The white paper is available on our website here. For information about RFG's services for nonprofit investment offices, email Information@Re...

June 25, 2019

Pundits are pointing to near-term challenges to the global economy’s productive run since the 2008- 2009 financial crisis. RFG recently asked experts for their suggestions about what endowments and foundations should consider before the next downturn. An abstract of the suggestions, previously provided to RFG endowment and foundation consortium clients in RFG’s weekly newsletter, follows.

Consider the holistic needs of your organization – This includes access to other sources of revenue beyond the investment fund you manage and uncertainties concerning the organization’s costs and expenses.

Consider investment risks that did not exist in 2008 – Investment portfolios have changed over the past 10 years and those changes might impact performance and liquidity expectations. Significant changes might include:

    ...

May 16, 2019

The need for every organization to understand the legal environment in which it operates (through a comprehensive, continuously improving compliance program) was underscored by significant announcements issued by federal enforcement agencies over the past few weeks. These announcements apply to all U.S. persons, even investors which are not required to register with a financial regulatory authority (such as the SEC).  

Moreover, even SEC registrants that fully comply with SEC compliance requirements may  still fall short of the new guidelines. The reason is simple: the new guidelines apply to activities that go beyond the requirements set out in the federal securities laws.

In the eyes of the U.S. federal regulators, you have been put on notice. Expect other domestic and international regulatory authoriti...

March 8, 2019

Pre-Conference Program:

Garnering Efficiencies for the Investment Office


Wednesday, May 15, 2019  |  1:00 PM - 4:30 PM

Citco Fund Services: 350 Park Ave, 13th Floor, New York, NY 10022

1:00 PM           AI and the Investment Office Workload

A look at the AI tools that exist today, what might exist in the future and how decisions to insource or outsource technology should be made, with a focus on document management.

Moderator: Christopher J. Adams, Chief Strategic Counsel, McDermott Discovery

Speakers:

Aaron Crews, Chief Data Analytics Officer, Littler Mendelson P.C.

Brian Kuhn, Partner, Co-Founder and Global Leader of the Watson Legal Practice, IBM

2:30 PM           Coffee Break

2:45 PM           Technology’s Increasin...

October 5, 2018

RFG has prepared, for its consortium members only, a white paper that discusses the issues encountered when an allocation is made to an investment manager that holds crypto assets.

The white paper notes that crypto assets are not themselves an asset class, but rather a term used to address a wide variety of fundamentally different investments. As crypto assets are new, and untested, each asset needs to be considered on its own to determine whether it is “fit” for its stated purpose. Considerations should include both a coding perspective and the perspective of whether the crypto asset appropriately addresses existing legal frameworks that apply to transactions and transfers. The white paper suggests eight specific areas that might be considered as part of this analysis.

A...

August 8, 2018

In partnership with DMS Governance, RFG has produced an illustrative chart of service providers seeking to assist charitable organizations in the receipt of cryptocurrency donations. The chart includes a detailed list of crypto asset service providers and liquidity providers who have indicated an interest in helping charitable organizations to accept, as well as to monetize, donations of cryptocurrencies. The document will continue to be updated on a periodic basis.

Concurrently with the release of the service provider guide, RFG has released to its consortium members a white paper that discusses selected accounting, tax, regulatory, contractual and policy considerations that arise for a charity and donor when contemplating a gift of Bitcoin, Ethereum Ripple, Bitcoin cash, and Litecoin (the top fi...

March 13, 2018

We are scrutinizing a new topic: the EU’s General Data Protection Regulation, which becomes effective May 25th. It seems possible that some charitable organizations — and their endowment investment offices — might technically fall within the GDPR’s scope. Although the drive behind the GDPR was to strengthen data protections provided to EU consumers who interact with internet companies that gather and retain information, the precise balance to its reach is yet to be determined. As so often happens with a new regulatory requirement, broad language was used, little guidance exists on the application to investors, and future regulatory clarifications could easily eliminate burdensome and onerous requirements (or, of more concern, expand them).  As if this were not enough,  there exists a great deal of uncer...

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