K&L Attorneys Suggest Oversight Strategies Amid Virus Crisis

In a recent publication, attorneys from K&L Gates discussed the SEC’s expanded relief for fund board in-person meetings in light of the global impact of COVID-19. The lawyers also listed several actions and strategies that boards, funds and advisers might wish to consider and discuss as the health crisis persists. These areas include:

  • Review existing business continuity, contingency, and/or incident response plans for the adviser, any sub-advisers, and other service providers to evaluate whether they contemplate the depth and breadth of the current situation, and update as necessary.
  • Evaluate operational processes and how they would be impacted if your organization, or some portion thereof, was required to work remotely for an extended period of time.
  • Prepare for and address any potential trading, valuation, and liquidity issues in light of ongoing developments.
  • Identify any funds with significant exposure to regions or sectors/industries significantly impacted by COVID-19, review and consider related risk disclosures, and, if warranted, implement any necessary risk mitigation measures.

“Relevant risks span a large spectrum, including operational, investment, valuation, liquidity, compliance, and third-party risks, among others. Fund directors should make sure they are receiving adequate information and updates from investment advisers about the funds’ preparedness to deal with these issues,” the K&L Gates lawyers wrote. Meanwhile, the NACD has developed a list of tactics for corporate directors to help their companies oversee risk of the global health crisis