We are currently watching the webcast live and are posting our comments below. You can watch the meeting live here: http://sec.gov/news/openmeetings.shtml.
We will be posting our review of the adopted regulations sometime later today.
11:05 AM ET: the open meeting has started and Chairman Schapiro (“CS”) is currently providing an overview of the meeting today.
11:12 AM ET: the registration requirements will not go into effect until the first quarter of 2012 to allow the SEC time to prepare their systems to accept all the hedge fund registration applications.
11:15 AM ET: Bob Plaze discussing new rulemakings – hedge fund registration will be extended to March 30, 2012. [No March 31, 2012 next year because of leap year.]
11:19 AM ET: Devin Sullivan discussing Form ADV amendments – important data on the private funds as well as service providers – auditors, prime brokers, custodians. Competitively sensitive information will not be required.
11:20 AM ET: Devin Sullivan discussing Exempt Reporting Advisers will be required to complete certain parts of Form ADV.
11:21 AM ET: Devin Sullivan discussing switch for certain SEC registered managers to state registration. Uniform method to calculate AUM. Current SEC registered advisers will need to file an amendment to show they can remain SEC registered.
11:22 AM ET: Devin Sullivan discusses pay to play rules and Municipal Advisers.
11:24 AM ET: VC advisers get a break – they can have up to 20% of fund's assets in non-qualifying VC investments. Other parts of the rule sound similar to the proposal.
11:25 AM ET: VC funds get grandfathering provision.
11:27 AM ET: $150M exemption rule is recommended to be adopted substantially as proposed. http://www.hedgefundlawblog.com/rule-203m-1-%E2%80%93-private-fund-adviser-exemption.html
11:28 AM ET: Foreign private adviser rule is recommended to be adopted substantially as proposed. http://www.hedgefundlawblog.com/rule-202a30-1-investment-advisers-act.html
11:29 AM ET: Commissioner Casey (“CC”) talking about VC funds and congressional intent. Supports VC rule and 20% basket of non-VC investments. Does not support some of the other rules – especially because of the exempt reporting advisers rule.
11:32 AM ET: CC disagrees with the reporting requirem
ents. Does not think there is distinction between exempt advisers and registered advisers with respect
to disclosure information on the ADV. Essentially she thinks this is a slippery slope.
11:34 AM ET: CC says the reporting requirements for exempt advisers needlessly imposes compliance requirements on incubating businesses.
11:36 AM ET: Commissioner Walter (“CW”) generally support the rulemaking. Believes information from exempt reporting advisers (ERAs) will be important for the SEC. But would have required broader information from the advisers. Seems like she wants more information from ERAs; wants to revisit the disclosures in a year.
11:38 AM ET: CW – can we get more information on the 20% basket for VC funds?
11:38 AM ET: Sullivan – Designed to provide flexibility for VC funds. The big question is whether it is 20% of invested or committed capital. 20% on committed, but the committment m
11:39 AM ET: CW – which states will examine advisers?
11:40 AM ET: Plaze – we asked all of the states about examination; MN would not be subject to examination. SEC will treat NY advisers as not subject to examination.
11:42 AM ET: Commissioner Aguilar (“CA”) makes a short statement and thank-yous.
11:44 AM ET: Commissioner Varedes (“CV”) supports the 20% basket for VC funds. Would have liked even more flexibility.
11:45 AM ET: CV disagrees with ERA reporting requirements – reporting requirements too close to registered advisers.
[BM to update the votes]
Family Office Definition
11:51 AM ET: CS providing background on family offices and proposed definition. See earlier post: http://www.hedgefundlawblog.com/sec-proposes-family-office-definition.html
11:52 AM ET: Staff member discussing exclusion. Certain conditions to prevent the family office to provide advice outside of the family, unless there is registration.
11:54 AM ET: Staff member discusses more technical parts of the proposal.
11:56 AM ET: CC, CW and CA did not have any questions for the staff.
11:58 AM ET: CP discusses some issues with respect to some of the changes made from the proposal.
11:59 AM ET: Plaze thanks commenters, especially the ABA, for their comments from a public policy perspective – the staff appreciates such comment letters.
11:59 AM ET: All Commissioners support adopting new family office rule.