If you’re a fund manager getting ready to register because you’ve been Dodd-Frank’ed, then you are likely in the middle of drafting Part 2 of Form ADV, the brochure. One item that caused my to pause was the risk factor requirements in Item 8. 8.B: For each significant investment strategy or method of analysis you … Read more »
Category: Investment Advisers Act
The SEC’s Asset Management Unit
Yesterday, Bruce Carton of Securities Docket hosted a webinar: The SEC’s Asset Management Unit and Strategies for Avoiding Trouble in 2011 and Beyond. He managed to get Bruce Karpati, the co-head of the SEC’s Asset Management unit, to participate. Also joining the presentation were John Reed Stark, Managing Director of Stroz Friedberg and former Chief, … Read more »
SEC Answers Questions About the Pay to Play Rule
The staff of the Division of Investment Management at the Securities and Exchange Commission has prepared responses to some questions about Rule 206(4)-5 under the Investment Advisers Act of 1940. Here are a few that caught my eye: Question II.6. Covered Associates’ Family Members. Q: Are contributions by an advisory employee’s family members covered under … Read more »
Are you an Investment Adviser?
There has been a lot of focus on the effect of Dodd-Frank on private fund managers. Many had relied on the small adviser exception from registration. If you had fewer than 15 clients (funds) you were exempt from regulation. With the loss of that exclusion, the industry has been looking to other ways to fall … Read more »
More Information on Part 2 of Form ADV
In October 2010, the Securities and Exchange Commission created a new Part 2 for Form ADV. Instead of filling in blanks, investment advisers need to create a brochure for delivery to clients and prospective clients. For fund managers getting ready to register, that means writing a brochure, not just filling in boxes. One question for … Read more »
Custody and Private Funds
Last year, the Securities and Exchange Commission put a new rule in place restricting an investment adviser’s ability to have custody of its clients’ assets. Given that many private fund managers are going to have to register as investment advisers they need to figure out how to comply with this rule. The rule is the … Read more »
SEC Study on Enhancing Investment Adviser Examinations
Now that most private funds managers are required to register with SEC as investment advisers, the SEC is considering abandoning them to regulation by FINRA. The SEC released the much anticipated report, a 40-page “ Study on Enhancing Investment Adviser Examinations” mandated by Section 914 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. … Read more »
Regulation of Private Fund Advisers at the State Level
The Dodd-Frank Wall Street Reform and Consumer Protection Act raised the level for registration with the SEC and removed the commonly used exemption from registration used by private fund advisers. That means smaller traditional investment advisers will be kicked out of the SEC registration and into the state registration systems. That also means that advisers … Read more »
Calculating Regulatory Assets Under Management for Private Funds
For private fund managers, one troubling aspect of Form ADV had been the calculation of “assets under management” in item 5.F. If securities are less than 50% of the portfolio then the portfolio would not be a securities account. Except for real estate debt funds, most real estate funds would end up with $0. (I’m … Read more »
Yes, the SEC Wants Real Estate Fund Managers to Register
Earlier I had pointed out how a real estate fund manager could be considered an investment adviser and have to register with the SEC under the Investment Advisers Act. In the Proposed Changes to Form ADV published on November 19, the SEC has made it clear that real estate funds are part of the mix. … Read more »