The US Securities and Exchange Commission has named 11-year veteran Jennifer McHugh as acting director for the division of investment management.
The division is responsible for overseeing registered investment advisers, a requirement most private equity firms will have to undergo as a result of new legislation. Registration will force most managers to undergo regular inspections by the SEC, designate a compliance officer, and explicitly outline how to deal with potential conflicts of interest, among other requirements.
McHugh, who joined the division in 1999, currently works as a senior advisor on investment advisor rules for SEC Chairman Mary Schapiro. She will act as director until a permanent replacement is found, at which time she will return to her role as senior advisor, according to a statement.
McHugh fills the role left by Andrew “Buddy” Donohue who had been the division's chief since 2006. Donohue was best known for revamping investment advisor custody rules and for curtailing investment advisor pay-to-play abuses.
More recently under Donohue's leadership, the SEC in June banned unregistered placement agents from soliciting commitments from public institutions on behalf of private investment firms. The 30 June ruling was significantly scaled back from its initial form, in which firms would have been barred from hiring any placement agents to interact with public pensions.
Prior to his time at the SEC, Donohue served as global general counsel for Merrill Lynch Investment Managers where he oversaw the firm's legal and regulatory compliance functions for alternative investments. He was also chairman of the firm's global risk oversight committee.