SEC Examines Firms on LIBOR Preparedness
The SEC Division of Examinations ("Exams") highlighted findings from its assessment of investment advisers’ preparedness for the cessation of LIBOR.
In a Risk Alert, Exams said that "firms’ preparation efforts varied considerably, depending on the type and amount of LIBOR exposure." Exams highlighted results from examinations of registered investment advisers and investment companies on (i) risk management and training; (ii) operations; (iii) portfolio management; and (iv) fiduciary responsibilities and investor communications. Exams also reviewed the extent to which investment advisers were keeping abreast of ongoing and new rates-related challenges and identified practices that firms were implementing across constituencies.
Commentary
The findings are (or should be) unsurprising to firms that have been active in preparing for LIBOR cessation. Nevertheless, the alert is useful to firms that are scrambling to address issues in the month and a half remaining, as well as those looking to ensure all reasonable preparations have been implemented.