PwC Warns Funds of Regulatory Challenges

PricewaterhouseCoopers urged fund company executives not to rest on their accomplishments of establishing new compliance departments
PwC officials, speaking at an industry conference this week, told mutual fund executives not to relax after satisfying new industry guidelines calling for each investment provider to install a CCO, The Wall Street Journal reports.
Tony Evangelista, a top PwC expert on regulatory issues, said the real challenges for mutual fund companies lie ahead and advised mutual fund companies to budget additional resources to ensure that in-house compliance procedures continue to meet new regulatory guidelines.
The Securities and Exchange Commission last year put the mutual fund industry on notice for increasingly frequent spot audits aimed at enforcing tougher compliance standards. Individual companies had the bulk of 2004 to develop internal administrative units required by the SEC's new laws, but going forward the industry will fly blind into 2005 without an established series of best practices for maintaining the stricter compliance standards.
Key challenges for trustees and compliance watchdogs include overseeing third-party vendors and distribution partners who push funds in various distribution channels. Independent auditors like PwC have already been hired by some mutual fund providers to assist with stiffer supervisory demands.