Search results

To analyze the June 9, 2017 Financial Industry Regulatory Authority, Inc. (“FINRA”) interpretive letter permitting the use of Related Performance Information in continuously offered closed-end registered investment company sales materials distributed solely to institutional investors.

Provides background, including the application of FINRA Rule 2210, and explains the conditions under which fund marketing materials may contain Related Performance Information.

While the interpretive letter will not result in a fundamental shift in the Industry’s approach to providing Related Performance Information of open- and closed-end funds to institutional investors, it also represents FINRA’s ongoing recognition that communications provided solely to institutional investors do not raise the same investor protection concerns as communications provided to retail investors.

Expert guidance from experienced investment management and investment fund lawyers.

The purpose of this paper is to provide selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in June, July, and August 2012.

The paper provides FINRA Regulatory Notice 12‐29, Communications with the Public, and Notice 12‐38, Short Interest Reporting.

Notice 12‐29: the SEC has approved FINRA's proposed rule changes to adopt a new set of communication rules that become effective February 4, 2013. They address communications in three categories: institutional communication, retail communication, and correspondence. Among other things, the rules cover approval, review and recordkeeping requirements; content standards; and guidelines for public appearances. Notice 12‐38: the SEC approved amendments to FINRA Rule 4560 to codify the requirement that member firms report only “gross” short interest existing in each proprietary and customer account (rather than net positions across accounts) and clarify that member firms' short interest reports must reflect only those short interest positions that settled.

These FINRA notices are selected to provide a useful indication of regulatory trends.

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise investment discretion over accounts that hold exchange‐traded equity securities, and to describe reporting requirements under Section 16 of the Exchange Act on certain persons considered “insiders” of a company that has a class of equity securities registered under Section 12 of the Exchange Act.

Describes the required reporting of significant acquisition and ownership positions on Schedules 13G and 13D, including the obligations of exempt investors, passive investors, and firms and their control persons; describes the required reporting of equity positions in managed portfolios of more than $100 million on Form 13F; and describes the reporting obligations of “insiders” (directors, officers, and principal stockholders) under Section 16 of the Exchange Act, including the content of Form 3 – Initial Statement of Beneficial Ownership of Securities, Form 4 – Statement of Changes of Beneficial Ownership of Securities, and Form 5 – Annual Statement of Beneficial Ownership of Securities.

Firms and their control persons managing discretionary accounts that hold more than 5 percent of an SEC‐reporting company's equity securities or manage discretionary accounts with market values of $100 million or more; institutional investment managers who exercise investment discretion over accounts with a fair market value of at least $100 million, and corporate insiders have significant reporting obligations under the Exchange Act.

Provides a clear, detailed reference concerning Section 13 and Section 16 Reporting Requirements.

The purpose of this paper is to provide investment advisers, broker dealers, individual investors and other securities firms with a current and detailed summary of the reporting regime under Sections 13 and 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and guidance on how to comply with the disclosure requirements of the U.S. Securities and Exchange Commission (the “SEC”) on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

The approach of this paper discusses the transactions or beneficial ownership interests in securities that trigger a reporting requirement under Section 13 and/or Section 16 of the Exchange Act, identifies the person or persons that have the obligation to file reports with the SEC, details the information required to be disclosed in the publicly available reports, and explains certain trading restrictions imposed on reporting persons as well as the potential adverse consequences of filing late or failing to make the requisite disclosures to the SEC.

The SEC continues to provide updated guidance on the disclosure requirements under Sections 13 and 16 of the Exchange Act, which individual investors and securities firms – largely insiders – must take into account when filing any new or amended reports on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

This article provides expert analysis and guidance from experienced securities lawyers.

To introduce the concepts of interval funds and tender offer funds and compare them to other pooled investment vehicles.

This article provides an overview of the interval fund and tender offer fund structures, including the law, regulations and market practices regarding redemptions, liquidity, fees and expenses and other key terms.

Interval funds and tender offer funds should be considered by alternative investment managers seeking to expand into public markets or traditional fund managers that seek additional portfolio flexibility.

In addition to a plain English analysis of the rules and regulations applicable to interval funds and tender offer funds, the article analyzes market practices regarding redemption frequency and amount.

To analyze and identify the key findings from the April 8, 2020, U.S. Securities and Exchange Commission’s (the “SEC”) recently approved rule amendments (“Adopted Rules”) extended to business development companies (“BDCs”) and registered closed-end funds and an Exemptive Order providing regulatory flexibility to BDCs.

Discusses the key takeaways and implications from the Adopted Rules and Exemptive Order.

The Adopted Rules provide BDCs and registered closed-end funds some of the more efficient registration, reporting, offering, and communication requirements currently applicable to operating companies. The Exemptive Order provides BDCs additional flexibility with respect to (1) the issuance and sale of senior securities and (2) the participation in certain joint transactions.

Firms and their representatives should heed the trends in both the substantial restitution FINRA is ordering and the related enforcement issues in the cases FINRA has brought.

Expert analysis and guidance from experienced asset management lawyers.

The Czech Republic, Hungary and Poland are regarded as being among the most advanced of the Central European countries in terms of financial sector development. This paper reviews the legislative and regulatory background to the development of investment funds in these countries and highlights the impact that governmental attitudes and mass privatisation programmes have had on fund market development.

The purpose of this article is to describe the process for forming and registering a new investment company (or mutual fund) or converting an existing hedge fund into a mutual fund and registering the converted fund. This article discusses the timing, tax and regulatory implications under Delaware law, the US Internal Revenue Code of 1986, the Investment Company Act of 1940 (the “1940 Act”), the Investment Advisers Act of 1940 (the “Advisers Act”), the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).

This article summarizes and analyzes rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to forming and registering new mutual funds and converting existing hedge funds into mutual funds under the 1940 Act and Advisers Act.

For smaller hedge fund managers who have recently registered with the SEC and desire to sponsor a new registered fund product as part of their advisory business, converting and registering an existing hedge fund is a viable alternative to forming an entirely new fund. The conversion process involves converting an existing hedge fund into a Delaware trust and then registering the new trust as a mutual fund under the 1940 Act. The adviser may, under certain circumstances, advertise the past performance of the hedge fund when marketing the new mutual fund. In addition, the adviser may continue to receive performance based or incentive compensation within the boundaries established by the Advisers Act. The authors believe that the conversion process is a viable and cost‐effective method for smaller hedge fund advisers to expand their existing investment advisory products and more easily grow assets under management.

This article provides a useful summary of the process for forming a new mutual fund or converting an existing hedge fund, including a brief outline of the SEC rules and regulations applicable to the fund registration process generally under the 1940 Act. Many hedge fund managers have recently incurred significant compliance costs as a result of registering as an investment adviser with the SEC. This article provides insight into the fund conversion process, which the authors believe is an overlooked and viable option for smaller hedge fund advisers to leverage existing compliance costs through sponsoring a registered fund product.

To explain the benefits and the regulations pertaining to Guernsey as a domicile for investment funds.

Explains the benefits of Guernsey as a fund domicile, the regulatory regime, and the types of fund vehicles used in Guernsey, registered and authorized.

Guernsey is one of the world’s largest offshore finance centers, with a thriving funds industry. The benefits of Guernsey as a fund domicile are substantial, including a proportionate, flexible and competitive funds regulatory regime, a stable political and legal structure, and a wealth of first-class fund service providers.

Expert guidance from experienced investment-fund lawyers.

To introduce, compare and contrast the new regulatory regimes for closed-ended funds recently enacted in the Cayman Islands and the British Virgin Islands (BVI).

Explores similarities and differences between the two regimes, as well as practical implications for fund managers, with respect to (1) the regulatory frameworks governing the funds; (2) the definitions of the types of funds covered by the regulations; (3) registration requirements and associated timing; (4) operating requirements, including responsibilities for portfolio management, valuation and safekeeping of fund property; the number of directors; audits; valuation procedures; safekeeping of fund assets; cash monitoring; identification of securities; offering documents, term sheets and marketing materials; and representation in the respective jurisdictions; and (5) additional requirements, including numbers and qualifications of investors.

The new legislation has been enacted in order to respond to certain European Union and other international recommendations and has the effect of aligning the regulatory regimes applicable to such funds structured in Cayman and BVI to the regulatory regimes applicable to such funds in other jurisdictions.

Expert guidance from lawyers with extensive experience in fund management, fund structuring and Cayman Islands and British Virgin Islands laws and regulations.