Trade errors can paralyze even the most seasoned hedge fund managers, both because of the potential magnitude of the financial losses, and because of the urgency with which such errors must be addressed and resolved. As a result, it is imperative that hedge fund managers adopt a plan as well as policies and procedures designed
Brad L. Caswell
The SEC’s New “Presence Exams”
More than 1500 private fund managers registered as investment advisers with the Securities and Exchange Commission (SEC) in 2012, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. For many fund managers, the registration process was daunting. In addition to the compliance policies and programs required by SEC Rule 206(4)-7,…
The Long View: Why Working Through Every Item on an Extensive Checklist May Obscure the Bigger Risks – Particularly Conflicts of Interest
Checklists are popular as the year end approaches. For hedge fund managers, Dodd-Frank and the Alternative Investment Fund Managers Directive make these checklists even more challenging. Most managers have devoted more resources than ever before to understanding and complying with all of the applicable requirements. But when it comes to regulatory compliance, well-intentioned managers may…
SEC Announces “Presence Exams” for Newly-Registered Investment Advisers
The staff of the U.S. Securities and Exchange Commission (the “SEC”) has announced its new National Exam Program (“NEP”) initiative to conduct “Presence Exams” of newly-registered investment advisers. In a letter sent today from various regional offices of the SEC to newly-registered advisers, the staff described the new exams as “focused” and “risk-based” and highlighted…
The Long View: How Hedge Fund Advertising Has Been Impacted by the JOBS Act
Marketing hedge funds to U.S. investors has long been shaped by the ban on “general solicitation” and “general advertising” contained in the private placement regulation commonly relied on by private funds. The Jumpstart Our Business Startups Act, or JOBS Act, enacted April 5, 2012, requires the SEC to modify its regulations to lift the ban.…
OCIE Director Identifies Key Compliance Areas for Private Equity Fund Advisers
On May 2, 2012, Carlo V. di Florio, the Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE), delivered a speech to the Private Equity International Private Fund Compliance Forum addressing key compliance issues for private equity funds. Director di Florio noted certain areas the SEC is focusing on with respect to private…
The Long View: U.S. Regulation of Private Fund Managers, Beyond Dodd-Frank
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has dominated the discussion of US regulatory requirements. During Q1 2012, thousands of private fund managers that were previously exempt had to register with the SEC or file as Exempt Reporting Advisers. But there are significant developments beyond Dodd-Frank. One major change involves new…
The JOBS Act — Implications for the Private Fund Industry
On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups (JOBS) Act (H.R. 3606). The JOBS Act is intended to stimulate job creation by facilitating access to capital markets for emerging growth companies. Of particular interest to private funds and their managers is the provision of the JOBS Act which eliminates…