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US Financial Reform Law: key changes for non‐US advisers and certain investors in hedge and private equity funds

Anne Marie Godfrey (Partner, Investment Management, Bingham McCutchen LLP, Hong Kong)
Thomas John Holton (Partner, Investment Management, Bingham McCutchen LLP, Boston, Massachusetts, USA)
Paul B. Raymond (Partner, Investment Management, Bingham McCutchen LLP, Boston, Massachusetts, USA)
Curtis Stefanak (Counsel, Investment Management, Bingham McCutchen LLP, New York, New York, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 23 November 2010

247

Abstract

Purpose

The purpose of this paper is to to summarize Advisers Act registration implications for non‐US advisers that now rely on the “private adviser” exemption from Advisers Act registration and to summarize the principal changes affecting investors in funds managed by non‐US advisers contained in the Dodd‐Frank Wall Street Reform and Consumer Protection Act of 2010.

Design/methodology/approach

The paper explains the elimination of the “private adviser” exemption and the creation of the narrower “foreign private adviser” and other exemptions from Adviser Act registration, reporting and recordkeeping requirements relating to private funds; the Dodd‐Frank Act's provisions for information sharing by the SEC and the confidentiality of private fund information; the “Volcker Rule's” limitation of investment by banking entities and non‐bank financial companies in hedge funds and private equity funds; changes in the definition of “accredited investor”; and the future adjustment of the “qualified client” test for inflation.

Findings

The Dodd‐Frank Act will require many investment advisers and fund managers with their principal offices and places of business outside the USA to register with the SEC and to observe, with respect to US clients, the full spectrum of SEC regulations that apply to registered investment advisers. The Act will also impose new disclosure and recordkeeping requirements on many non‐US advisers.

Originality/value

The paper provides expert guidance from experienced financial services lawyers.

Keywords

Citation

Godfrey, A.M., Holton, T.J., Raymond, P.B. and Stefanak, C. (2010), "US Financial Reform Law: key changes for non‐US advisers and certain investors in hedge and private equity funds", Journal of Investment Compliance, Vol. 11 No. 4, pp. 19-26. https://doi.org/10.1108/15285811011098938

Publisher

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

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