As a general rule, investment adviser cannot charge performance fees. Section 205(a)(1) of the Investment Advisers Act of 1940 generally prohibits an investment adviser from entering into, extending, renewing, or performing any investment advisory contract that provides for compensation to the adviser based on a share of capital gains on, or capital appreciation of, the … Read more »
Category: Investment Advisers Act
Yes, the SEC Wants Real Estate Fund Managers to Register
After six months baking in the oven, the new Form ADV is ready. (To be more precise, the new Part 1 is ready. Part 2 has been sitting on the table for almost a year.) Form ADV still calls for real estate fund managers to register as investment advisers Earlier I had pointed out how … Read more »
Real Estate Fund Managers and the CFTC
Many real estate fund managers, used to the lack of regulatory oversight, are wrestling with the implications of Dodd-Frank. One of the biggest sources of hand-wringing is whether to register as an investment adviser given the removal of the 15 clients exemption from the Investment Advisers Act. Another agency is potentially making regulatory changes leading … Read more »
What do Wyoming, New York, and Minnesota Have in Common?
They don’t examine investment advisers. Wyoming has long been on this list because it does not have a law regulating investment advisers. In Item 2 of Form ADV there was a box to check if your principal office and place of business was Wyoming. That kept you in SEC registration. The importance of whether a … Read more »
Finally, Some SEC Action on the July 21 Deadline for Fund Managers
If you’re a private fund manager you have been worried about the looming July 21 deadline for registration. Given the 45 day review period, the filing deadline was June 6. That came and went without the SEC having the rules in place for registration. Sure, the SEC commissioners and staff have been saying the plan … Read more »
Have You Set Up Your IARD Account?
With the impending deadline for filing Form ADV to register as an investment adviser, you need to jump through some hoops before you can do the filing. First step is visiting the Investment Adviser Registration Depository. Form ADV needs to be filed electronically and this is the electronic mailbox. But first you need an account. … Read more »
Time for the SEC to Extend a Deadline
Dodd-Frank set a July 21 deadline for changes to the Investment Advisers Act in Title IV: The Private Fund Investment Advisers Registration Act. This included the expiration of the private adviser exemption from registration under the Investment Advisers Act, the addition of an new exemption for “venture capital fund advisers” and the increase in the … Read more »
Will Private Equity be Exempted from Registration?
In earlier versions of Dodd-Frank, when it was being formulated in the House committee, there was an exemption for private equity fund managers from registration under the Investment Advisers Act. It also had an exemption for venture capital fund managers. Only the venture capital exemption managed to survive. Of the many attempts to cut back … Read more »
The SEC Is Making it Harder for Investment Advisers to Earn Performance Fees
The Securities and Exchange Commission is proposing to raise the dollar thresholds for someone to be considered a “qualified client.” The definition of a qualified client is set out in Rule 205-3. This is an exemption to the Section 205(a)(1) general prohibition on performance fees. Section 205(e) grants the SEC the power to create an … Read more »
Massachusetts Is Looking to Dodd-Frank Investment Advisers and Fund Managers
Just to keep you on your toes if you have less than $150 million under management, states are now filling in the gaps left by Dodd-Frank. If you are under that threshold, you lose the ability to register with SEC and now have to look to at being regulated at the state level. Massachusetts used … Read more »