Doug Cornelius on compliance for private equity real estate
ECM had investment advisory clients and managed two private funds in which some of its advisory clients invested. Based on the SEC order it looks like ECM tripped over the complexities of the Custody Rule in managing the investments. An investment adviser has custody of client assets if it holds, directly or indirectly, client funds … Read more »
The Custody Rule is full of foot-faults. The concept is easy: have a third party make sure that the investment adviser is not stealing money. That turns out to be a bit harder in execution. Mohlman Asset Management Fund was using the accounting firm Katz, Sapper & Miller, LLP to help with its funds’ financial … Read more »
The concept behind the custody rule is simple. The adviser needs to hold client assets safely and needs a third -party to verify that the adviser is actually holding the assets. But as it’s been put in place, the Custody Rule is complicated. At times the SEC has needed to provide guidance, and then provide … Read more »
The Securities and Exchange Commission’s Division of Investment Management recently released updated guidance on the Custody Rule. Private funds, especially private equity funds, have been wrestling with the SEC’s Custody Rule. The rule clearly comes from the perspective of regulating retail investment advisers and hedge funds. It fails to deali n a useful manner with … Read more »
The Securities and Exchange Commission has provided some updated guidance on the Custody Rule for private funds. It has sometimes been tricky for private funds to comply with Rule 206(4)-2. The custody rule deems it to be a fraudulent, deceptive or manipulative act, practice or course of business for an adviser to have custody of … Read more »
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 »
With the removal of the 15 client rule exemption from registration with the SEC, many private funds are going to have to comply the custody rule Rule 206(4)-2. Private equity firms will have the most problems trying to meets the demands of the rule. The SEC is trying to help. They updated the Staff Responses … Read more »
With the impending removal of the 15 Client Rule exemption from registration with the SEC, I was scratching my head trying to figure how to make the SEC’s new custody rule work for private equity. The SEC recently updated its guidance on custody rule compliance truing to add clarity for advisers to pooled investment vehicles. … Read more »
The Securities and Exchange Commission adopted the proposed Custody Rule for investment advisers originally proposed last May. (See: SEC Releases Proposed Custody Rules for Investment Advisers) As is typical with the SEC, they announced the rule was approved before they made the final version of rule available. The rule amendments will be effective 60 days … Read more »
On May 14, the Securities Exchange Commission said they were proposing New Custody Rules for Investment Advisers. They summarized the proposed rules but did not release the actual text of the proposed rules. Now the proposed rules are available in Release No. IA-2876 (.pdf). Comments must be received on or before July 28, 2009. SUMMARY: … Read more »