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Should you stay or go? Private fund adviser registration after Goldstein

Thomas S. Harman (Partner, Morgan, Lewis & Bockius LLP, Washington, DC, USA (tharman@morganlewis.com))
Monica L. Parry (Counsel at Morgan, Lewis & Bockius LLP, Washington, DC, USA, (mparry@morganlewis.com))

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 1 April 2006

128

Abstract

Purpose

To discuss factors that a private fund advisor should consider in its decision to remain registered with Securities and Exchange Commission (SEC) or to deregister in light of the D.C. Court of Appeals June 2006 decision in Goldstein v. Securities and Exchange Commission.

Design/methodology/approach

Analyzes and compares the advantages and disadvantages of staying registered and deregistering; discusses the requirements of state registration for advisers that are note registered with the SEC; and analyzes the consequences to private fund advisors if the SEC does not repropose certain rule amendments adopted along with Rule 203(b)(3)‐2 concerning bookkeeping, performance fees, and custody.

Findings

Advisers should carefully consider their facts and circumstances and their business plans when analyzing the consequences of deregistration with the SEC – most importantly, the possibility of multiple state registration – before filing to deregister. Especially if the SEC restores the rule amendments the Goldstein decision struck down, staying with the SEC – the regulator you know – may be better than registering with a state.

Originality/value

Provides an up‐to‐date analysis of factors that private funds should consider concerning SEC registration in light of the recent Goldstein decision.

Keywords

Citation

Harman, T.S. and Parry, M.L. (2006), "Should you stay or go? Private fund adviser registration after Goldstein", Journal of Investment Compliance, Vol. 7 No. 2, pp. 28-33. https://doi.org/10.1108/15285810610711509

Publisher

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Emerald Group Publishing Limited

Copyright © 2006, Company

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