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1 – 10 of over 19000Vadim Avdeychik and Justin Capozzi
This paper aims to provide an overview of recent US Securities and Exchange Commission (SEC) Division of Investment Management staff (“Staff”) guidance related to investment funds…
Abstract
Purpose
This paper aims to provide an overview of recent US Securities and Exchange Commission (SEC) Division of Investment Management staff (“Staff”) guidance related to investment funds registered under the Investment Company Act of 1940 that seeks to provide exposure to cryptocurrencies or cryptocurrency-related products.
Design/methodology/approach
This paper provides analysis regarding the Staff’s view on registered investment companies that intend to invest in cryptocurrencies or cryptocurrency-related products, including an overview of the questions posed by the Staff with respect to registered investment companies that seek to hold cryptocurrencies or cryptocurrency-related products, which are divided into five categories: valuation, liquidity, custody, arbitrage (for exchange-traded funds) and potential manipulation and other risks.
Findings
The Staff is asking for additional information from industry participants to fully analyze and evaluate registered investment companies that seek to invest in cryptocurrencies.
Practical implications
The industry should continue to provide information to the Staff with the short-term goal of fostering an open dialogue and with the long-term goal of launching a registered investment company that invests in cryptocurrencies or cryptocurrency-related products.
Originality/value
This paper provides practical guidance from experienced lawyers of the Investment Company Act and Securities Act.
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Mark Amorosi, George Zornada, Todd Gibson, Joel Almquist and Pablo J. Man
To analyze the recent SEC no-action relief allowing a non-US investment company to invest as a feeder fund in a US registered open-end management investment company without…
Abstract
Purpose
To analyze the recent SEC no-action relief allowing a non-US investment company to invest as a feeder fund in a US registered open-end management investment company without complying with all of the conditions of Section 12(d)(1)(E) of the Investment Company Act of 1940.
Design/methodology/approach
This article discusses the various conditions that a non-US investment company investing as a foreign feeder in a US registered open-end management investment company must satisfy in order to avoid complying with certain provisions of Section 12(d)(1)(E) of the Investment Company Act of 1940. In addition, the article analyzes certain potential tax and regulatory challenges facing firms seeking to rely on the relief.
Findings
This article concludes that the SEC no-action relief is an incremental step in reducing barriers to global distribution of US registered funds and may marginally increase the use of cross-border master-feeder arrangements as contemplated by the no-action letter. Nevertheless, this article cautions that significant impediments to global distribution of US registered funds remain, including tax withholding and non-US law issues.
Originality/value
This article contains valuable information about the regulatory impediments to global distribution of US registered funds, as well as learned assessments of the impact of recent developments in this space by experienced securities lawyers.
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Peter J. Shea, Kathleen H. Moriarty, Kenneth M. Rosenzweig, Marybeth Sorady and Gregory E. Xethalis
The purpose of this article is to explain the implications for registered fund advisors of the February 9, 2012 final amendments the Commodity Futures Trading Commission (CFTC…
Abstract
Purpose
The purpose of this article is to explain the implications for registered fund advisors of the February 9, 2012 final amendments the Commodity Futures Trading Commission (CFTC) made to its Rule 4.5 exemption from commodity pool operator (CPO) registration for registered funds.
Design/methodology/approach
This article explains how amended Rule 4.5 will be applied to advisors and sub‐advisors of registered investment companies and the managers of foreign corporations controlled by registered investment companies. The article also describes the expected impact of the CPO compliance regime under a proposed harmonization of CFTC CPO regulation with Securities and Exchange Commission regulation of registered fund advisers.
Practical implications
All registered fund advisers should conduct a review of each of their registered funds' portfolios, investment strategies and marketing materials to evaluate their status as CPOs by the compliance deadline. Advisers who cannot comply with the amended Rule 4.5 by the compliance deadline should prepare for CPO registration.
Originality/value
The paper provides practical guidance from experienced financial services lawyers.
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For the foreign investment adviser wishing to do business in the USA, the regulatory climate has never been more propitious. This paper describes the recently restructured…
Abstract
For the foreign investment adviser wishing to do business in the USA, the regulatory climate has never been more propitious. This paper describes the recently restructured framework of federal and state law and regulation applicable to non‐US advisers that provide investment advisory services to US clients, whether from abroad or through a US subsidiary or affiliate. For those advisers that will register either themselves or subsidiaries or affiliates as investment advisers in the US, the paper first describes the requirements of the Investment Advisers Act of 1940 (Advisers Act), rules thereunder and significant interpretations and discusses the SEC's recent enforcement priorities. It then discusses the scope of and limitations imposed under recent interpretations permitting non‐US advisers that register in the USA to comply with US restrictions only in connection with their US clients. Finally, the paper discusses other legal and regulatory provisions that apply if the adviser offers interests in a pooled investment vehicle (ie an investment company) in the USA.
Marybeth Sorady, Daren Domina, Wendy Cohen, Fred Santo, Henry Bregstein, Meryl Wiener, Marilyn Okoshi and Jack P. Governale
This paper aims to explain the rules recently adopted by the Securities and Exchange Commission under the provisions of the Dodd‐Frank Wall Street Reform and Consumer Protection…
Abstract
Purpose
This paper aims to explain the rules recently adopted by the Securities and Exchange Commission under the provisions of the Dodd‐Frank Wall Street Reform and Consumer Protection Act relating to the increased asset threshold for federal registration as an investment adviser, the new exemptions from investment adviser registration (including the exclusion of “family offices” from the definition of an investment adviser), the enhanced reporting obligations imposed on registered and certain exempt advisers, and the definition of a “qualified client” for purposes of applying the performance fee rule under the Investment Advisers Act.
Design/methodology/approach
This paper summarizes the principal content of the Rules and explains their application to investment advisers, focusing in particular on analyzing the impact of the Rules on US and non‐US advisers to private funds.
Findings
The Rules clarify important aspects of the Dodd‐Frank amendments to the Investment Advisers Act and expand the scope of certain registration exemptions as they relate to foreign advisers. The Rules also expand significantly the family office exclusion from investment adviser status.
Originality/value
The paper provides expert guidance from experienced financial services lawyers.
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In the wake of the Securities and Exchange Commission’s (the “SEC”) adoption of new rule 203(b)(3)‐2 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”)…
Abstract
In the wake of the Securities and Exchange Commission’s (the “SEC”) adoption of new rule 203(b)(3)‐2 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), many investment advisers that provide advisory services to hedge funds, and that previously had benefited from an exemption from federal registration under the Advisers Act, now will find that they are no longer eligible for such exemption. They will have to become federally registered investment advisers. As a result, such advisers will find themselves subject to a variety of rules and regulations regarding various compliance matters. Significantly, for the first time these advisers also may be able to market their services
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The purpose of this paper is to provide an overview of how the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended , applies to securities professionals such as…
Abstract
Purpose
The purpose of this paper is to provide an overview of how the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended , applies to securities professionals such as registered investment advisers, registered broker‐dealers and individual registered representatives and financial planners who advise, manage, or trade for investment portfolios of private employee benefit plans and individual retirement accounts.
Design/methodology/approach
The paper is designed as a primer to familiarize securities professionals with the terminology, scope and subject‐matter of ERISA as it applies to benefit plan investment transactions. When appropriate, the regulatory framework of ERISA is compared and contrasted with the more familiar securities law regulatory scheme.
Findings
The various Federal laws loosely known as “ERISA” significantly impact securities professionals in connection with the marketing of financial products and services to employee benefit plans, including IRAs, and it is critical that securities professionals have a general overview of how they do so.
Research limitations/implications
The research set out is only a broad summary, and covers an area of law that is rapidly developing. It should not be considered a definitive summary of the law but a starting‐point for further, in‐depth inquiry.
Practical implications
Any financial professional seeking to develop or market financial products and services to benefit plans can use the paper to become familiar with the framework and terminology of ERISA.
Originality/value
This is a reprint of a paper first published in 2004, with extensive revisions to reflect sweeping changes in the law and new developments in the financial marketplace, plus an overview of “hot topics”.
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The following is an overview of how the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), applies to securities professionals such as registered investment…
Abstract
The following is an overview of how the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), applies to securities professionals such as registered investment advisers (“RIAs”) and registered broker‐dealers who advise, manage, or trade for investment portfolios of employee benefit plans subject to ERISA. The principal focus of this outline is on securities registered under the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934 (the “1934 Act”), and securities of investment companies registered under the Investment Company Act of 1940. Many of these principles also will apply directly to unregistered securities, as well as to other investments offered by banks, insurance companies, commodity trading advisers and real estate advisers, though there may be some variation.
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On October 26, 2004, the Securities and Exchange Commission (the “Commission” or the “SEC”) adopted a new rule and related amendments requiring, among other things, that hedge…
Abstract
On October 26, 2004, the Securities and Exchange Commission (the “Commission” or the “SEC”) adopted a new rule and related amendments requiring, among other things, that hedge fund managers register with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) by February 1, 2006. In this article, we refer to the totality of the recent rulemaking as the “new rules.” The new rules and a lengthy interpretive release (the “Adopting Release”) were made available to the public on December 2, 2004.The new rules only slightly modify the text of the proposed rules published by the SEC on July 20, 2004. We will refer to the July 20, 2004 rules as the “proposed rules.” The proposed rules, which were opposed by two of the five SEC commissioners at the time they were announced, provoked a loud outcry and strong opposition. According to the Adopting Release, the SEC received 161 comment letters from investors, hedge fund managers, mutual fund managers, law firms, and others. Of these, only 36 supported the proposed rules, 83 argued against them, and the remainder presented a neutral view. The objections included “concerns about the costs of compliance under the new rule[s], questions about [SEC] effectiveness in preventing hedge fund fraud, and the potential intrusiveness of [SEC] oversight of hedge fund managers.”
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Thomas S. Harman and Monica L. Parry
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…
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.
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