Fund-Technology.com

HedgeOp wins patent for compliance software

Posted: 29 January 2009

HedgeOp Compliance, a provider of specialized compliance software and consulting services for alternative asset managers, has been awarded a patent on its ComplianceTrak software, a workflow tool that enables managers to meet their compliance requirements efficiently and cost effectively.

The technology represents a new model for hedge fund compliance, HedgeOp claimed, one that offers managers business process guidance as well as tools to capture and deliver the information required.

HedgeOp’s announcement comes at a time when top US officials are offering clear signals that they intend to tighten up oversight of the hedge fund industry.

At a time when managers are cutting costs and reducing staff, officials are stressing the need for managers to maintain their support for compliance. US Treasury Secretary-nominee Timothy Geithner last week pledged to pursue registration of hedge funds to improve market transparency, and Mary Schapiro, the new SEC chief, stated at her confirmation hearing that she supports the re-registration of hedge funds to help the SEC keep a closer eye on their activities.

Last month, Lori Richards, director of the SEC's Office of Compliance Inspections and Examinations, urged SEC-registered firms to ensure that their compliance programs are adequately resourced and integrated into their firms’ investment activities.

However, for many managers, the cost of achieving the necessary level of compliance can be prohibitive.

“Many fund managers are finding that with reduced assets under management and regulation on the horizon, the cost of staying compliant is becoming prohibitive. ComplianceTrak is a customizable web-based system that guides end users as they capture the information required to construct the reporting, monitoring and tracking infrastructure necessary to demonstrate compliance,” said Bill Mulligan, HedgeOp’s, CEO.  “This patent demonstrates that ComplianceTrak is exceptional in its approach to helping investment managers satisfy SEC requirements.”

HedgeOp’s patented ComplianceTrak software provides chief compliance officers, chief financial officers and their staffs with cost-effective workflow technology to capture the information required to satisfy SEC requirements through reporting, monitoring and tracking. The web-based technology allows real-time access to information in an intuitive, customizable format.

Because ComplianceTrak was designed as a dynamic web-based application, it can support a compliance infrastructure and process based on the needs of an organization and best industry practices.  The tool’s workflow technology enables the end user – whether it is the chief compliance officer or the chief financial officer – to provide the level of detail they require to improve transparency and address greater demands from investors and regulators. 

Since its development in 2001, ComplianceTrak has evolved into a front-end application that supports managers ranging from those with multi-billion dollars assets under management to startups. To date, dozens of managers and more than one hundred hedge funds employ ComplianceTrak’s software to meet their regulatory requirements, at a fraction of the cost of developing internal compliance systems.

“In the wake of the financial crisis, and in particular, the damage it has had on investor confidence, investment in compliance infrastructure has become a chief concern for many managers,” Mulligan said. “Investment managers recognize that fulfilling compliance requirements is no longer optional as it becomes increasingly challenging to retain and attract investor assets. ComplianceTrak provides a cost-effective way for managers to achieve a true culture of  compliance.”

End-users access ComplianceTrak’s secure portal via the Internet on a real-time basis, providing personalized information to the program that allows it to develop a set of tasks and documentation required by the manager in order to manage the compliance process.

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