Clients, Friends, Associates:

As we near the end of 2021, we have developed a checklist to help managers effectively oversee the business and regulatory landscape for the coming year. We have also highlighted some recent industry updates that we believe may impact our clients. While we strive to present an informative, albeit brief, overview of these topics, we are also available should you have any related questions.

This update includes the following:

• Annual Compliance & Other Items
• Annual Fund Matters
• Annual Management Company Matters
• Regulatory & Other Items from 2021
• 2022 Compliance Calendar

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Annual Compliance & Other Items

Annual Privacy Policy Notice. On an annual basis, Securities and Exchange Commission (“SEC”) registered investment advisers (“SEC RIAs”) are required to provide natural person clients with a copy of the firm’s privacy policy if: (i) the SEC RIA has disclosed nonpublic personal information other than in connection with servicing consumer accounts or administering financial products; or (ii) the firm’s privacy policy has changed. The SEC has provided a model form and accompanying instructions for firm privacy policies.

Annual Compliance Review. The Chief Compliance Officer (“CCO”) of a registered investment advisor (“RIA”) must conduct a review of the adviser’s compliance policies and procedures annually. This annual compliance review should be in writing and presented to senior management. CCOs should consider additions, revisions, and updates to the compliance program as may be necessary. We recommend firms discuss the annual review with their outside counsel or compliance firm to obtain guidance about the review process and a template for the assessment. Conversations regarding the annual review may raise sensitive matters, and advisers should ensure that these discussions are protected by attorney-client privilege. Advisers that are not registered may still wish to review their procedures and/or implement a compliance program as a best practice.

Form ADV Annual Amendment. RIAs or managers filing as exempt reporting advisers (“ERAs”) with the SEC or a state securities authority must file an annual amendment to their Form ADV within 90 days of the end of their fiscal year. For most managers, the Form ADV amendment will be due on March 31, 2022. RIAs must provide a copy of the updated Form ADV Part 2A brochure and Part 2B brochure supplement (or a summary of changes with an offer to provide the complete brochure) to each “client” and, if applicable, Part 3 (Form CRS: Client Relationship Summary) to each “retail investor” with which the RIA has entered into an investment advisory contract. Note that for SEC-registered advisers to private investment vehicles, a “client” for purposes of this rule refers to the vehicle(s) managed by the adviser and not the underlying investors. State-registered advisers need to examine their states’ regulations to determine who constitutes a “client.” For purposes of the Form ADV Part 3, a “retail investor” means a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, family, or household purposes.

Switching to/from SEC Regulation.

SEC Registration. Managers who no longer qualify for SEC registration as of the time of filing the annual Form ADV amendment must withdraw from SEC registration within 180 days after the end of their fiscal year (June 30, 2022, for most managers), by filing a Form ADV-W. Such managers should consult with legal counsel to determine whether they are required to register in the states in which they conduct business. Managers who are required to register with the SEC as of the date of their annual amendment must register with the SEC within 90 days of filing the annual amendment (June 30, 2022, for most managers, assuming the annual amendment is filed on March 31, 2022).

Exempt Reporting Advisers. Managers who no longer meet the definition of an ERA will need to submit a final report as an ERA and apply for registration with the SEC or the relevant state securities authority, as applicable, generally within 90 days after the filing of the annual amendment (June 30, 2022, for most managers, assuming the annual amendment is filed on March 31, 2022).

Custody Rule Annual Audit.

SEC RIAs. SEC RIAs must comply with specific custody procedures, including: (i) maintaining client funds and securities with a qualified custodian; (ii) having a reasonable basis to believe that the qualified custodian sends an account statement to each advisory client at least quarterly; and (iii) undergoing an annual surprise examination conducted by an independent public accountant.

SEC RIAs to pooled investment vehicles may avoid both the quarterly statement and surprise examination requirements by having audited financial statements prepared for each pooled investment vehicle in accordance with generally accepted accounting principles (“GAAP”) by an independent public accountant registered with the Public Company Accounting Oversight Board (“PCAOB”). Audited financial statements must be sent to investors in the fund within 120 days after the fund’s fiscal year-end (or for fund-of-fund clients, within 180 days after fiscal year-end). SEC RIAs should review their internal procedures to ensure compliance with the custody rules.

California RIAs. California-registered investment advisers (“CA RIAs”) that manage pooled investment vehicles and are deemed to have custody of client assets are also subject to independent party surprise examinations. However, CA RIAs can avoid these additional requirements by engaging a PCAOB-registered auditor to prepare and distribute audited financial statements to all beneficial owners of the pooled investment vehicle, and the Commissioner of the California Department of Financial Protection and Innovation (“DFPI”). Those CA RIAs that do not engage an auditor must, among other things: (i) provide notice of such custody on the Form ADV; (ii) maintain client assets with a qualified custodian; (iii) engage an independent party to act in the best interest of investors to review fees, expenses, and withdrawals; and (iv) retain an independent certified public accountant to conduct surprise examinations of assets.

Other State RIAs. Advisers registered in other states should consult their legal counsel about those states’ specific custody requirements.

California Minimum Net Worth Requirement and Financial Reports.

CA RIAs with Discretion. Every CA RIA (other than those also registered as broker-dealers) that has discretionary authority over client funds or securities, regardless of if they have custody, must maintain a net worth of at least $10,000 (CA RIAs with custody are subject to heightened minimum net worth requirements, discussed further below).

CA RIAs with Custody. Generally, every CA RIA (other than those also registered as broker-dealers) that has custody of client funds or securities must maintain a minimum net worth of $35,000. However, a CA RIA that: (i) is deemed to have custody solely because it acts as the general partner of a limited partnership, or a comparable position for another type of pooled investment vehicle; and (ii) otherwise complies with the California custody rule described above is exempt from the $35,000 minimum (and instead is required to maintain the $10,000 minimum).

Financial Reports. Every CA RIA subject to the above minimum net worth requirements must file certain reports with the DFPI. In addition to annual reports, CA RIAs may be required to file interim reports or reports of financial condition if they fall below certain net worth thresholds.

Annual Re-Certification of CFTC Exemptions. Commodity pool operators (“CPOs”) and commodity trading advisers (“CTAs”) currently relying on certain exemptions from registration with the Commodity Futures Trading Commission (“CFTC”) are required to re-certify their eligibility within 60 days of the calendar year-end. A common example includes the 4.13(a)(3) exemption also known as the “de minimis” exemption. CPOs and CTAs currently relying on relevant exemptions should consult with legal counsel to evaluate whether they remain eligible to rely on such exemptions.

CPO and CTA Annual Updates. Registered CPOs and CTAs must prepare and file Annual Questionnaires and Annual Registration Updates with the National Futures Association (“NFA”), as well as submit payment for annual maintenance fees and NFA membership dues. Registered CPOs must also prepare and file their fourth-quarter report for each commodity pool on Form CPO-PQR, while CTAs must file their fourth-quarter report on Form CTA-PR. Unless eligible to claim relief under Regulation 4.7, registered CPOs and CTAs must update their disclosure documents periodically, as they may not use any document dated more than 12 months prior to the date of its intended use. Disclosure documents that are materially inaccurate or incomplete must be promptly corrected, and redistributed to pool participants.

Trade Errors. Managers should ensure that all trade errors are properly addressed pursuant to the manager’s trade errors policies by the end of the year. Documentation of trade errors should be finalized, and if the manager is required to reimburse any of its funds or other clients, it should do so by year-end.

Soft Dollars. Managers that participate in soft dollar programs should make sure that they have addressed any commission balances from the previous year.

Schedule 13G/D and Section 16 Filings. Managers who exercise investment discretion over accounts (including funds and separately managed accounts) that are beneficial owners of 5% or more of a registered voting equity security must report these positions on Schedule 13D or 13G. Passive investors are generally eligible to file the short-form Schedule 13G, which is updated annually within 45 days of the end of the year. Schedule 13D is required when a manager is ineligible to file Schedule 13G and is due 10 days after acquiring more than 5% beneficial ownership of a registered voting equity security. For managers who are also making Section 16 filings, this is an opportune time to review your filings to confirm compliance and anticipate needs for the first quarter.

Section 16 filings are required for “corporate insiders” (including beneficial owners of 10% or more of a registered voting equity security). An initial Form 3 is due within 10 days after becoming an “insider”; Form 4 reports ownership changes and is due by the end of the second business day after an ownership change; and Form 5 reports any transactions that should have been reported earlier on a Form 4 or were eligible for deferred reporting and is due within 45 days after the end of each fiscal year.

Form 13F. A manager must file a Form 13F if it exercises investment discretion with respect to $100 million or more in certain “Section 13F securities” within 45 days after the end of the year in which the manager reaches the $100 million filing threshold. The SEC lists the securities subject to 13F reporting on its website.

Form 13H. Managers who meet one of the SEC’s large trader thresholds (generally, managers whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month) are required to file an initial Form 13H with the SEC within 10 days of crossing a threshold. Large traders also need to amend Form 13H annually within 45 days of the end of the year. In addition, changes to the information on Form 13H will require interim amendments following the calendar quarter in which the change occurred.

Form PF. Managers to private funds that are either registered with the SEC or required to be registered with the SEC and who have at least $150 million in regulatory assets under management (“RAUM”) must file a Form PF. Private advisers with less than $1.5 billion in RAUM must file Form PF annually within 120 days of their fiscal year-end. Private advisers with $1.5 billion or more in RAUM must file Form PF within 60 days of the end of each fiscal quarter.

Form MA. Investment advisers that provide advice on municipal financial products are considered “municipal advisors” by the SEC and must file a Form MA annually, within 90 days of their fiscal year-end.

SEC Form D. Form D filings for most funds need to be amended annually, on or before the anniversary of the most recently filed Form D. Copies of Form D are publicly available on the SEC’s EDGAR website.

Blue Sky Filings. On an annual basis, a manager should review its blue sky filings for each state to make sure it has met any initial and renewal filing requirements. Several states impose late fees or reject late filings altogether. Accordingly, it is critical to stay on top of filing deadlines for both new investors and renewals. We also recommend that managers review blue sky filing submission requirements. Many states now permit blue sky filings to be filed electronically through the Electronic Filing Depository (“EFD”) system, and certain states will now only accept filings through EFD.

IARD Annual Fees. Preliminary annual renewal fees for state-registered and SEC-registered investment advisers are due on December 13, 2021. Failure to submit electronic payments by the deadline may result in registrations terminating due to a “failure to renew.” If you have not already done so, you should submit full payment into your Renewal Account by E-Bill, check, or wire as soon as possible.

Pay-to-Play and Lobbyist Rules. SEC rules disqualify investment advisers, their key personnel, and placement agents acting on their behalf from seeking to be engaged by a governmental client if they have made certain political contributions. State and local governments have similar rules, including California, which requires internal sales professionals who meet the definition of “placement agents” (people who act for compensation as finders, solicitors, marketers, consultants, brokers, or other intermediaries in connection with offering or selling investment advisory services to a state public retirement system in California) to register with the state as lobbyists and comply with California lobbyist reporting and regulatory requirements. Note that managers offering or selling investment advisory services to local government entities must register as lobbyists in the applicable cities and counties. State laws on lobbyist registration differ significantly, so managers should carefully review reporting requirements in the states in which they operate to make sure they comply with the relevant rules.

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Annual Fund Matters

New Issue Status. On an annual basis, managers need to confirm or reconfirm the eligibility of investors that participate in initial public offerings, or new issues, pursuant to both Financial Industry Regulatory Authority, Inc. (“FINRA”) Rules 5130 and 5131. Most managers reconfirm investor eligibility via negative consent (i.e., investors are informed of their status on file with the manager and are asked to notify the manager of any changes), whereby a failure to respond by any investor operates as consent to its current status.

ERISA Status. Given the significant problems that can occur from not properly tracking ERISA investors in private funds, we recommend that managers confirm or reconfirm on an annual basis the ERISA status of their investors. This is particularly important for managers that track the underlying percentage of ERISA funds for each investor, with respect to each class of interests in a pooled investment vehicle.

Wash Sales. Managers should carefully manage wash sales for year-end. Failure to do so could result in book/tax differences for investors. Certain dealers can provide managers with swap strategies to manage wash sales, including Basket Total Return Swaps and Split Strike Forward Conversion. These strategies should be considered carefully to make sure they are consistent with the investment objectives of the fund.

Redemption Management. Managers with significant redemptions at the end of the year should carefully manage unwinding positions to minimize transaction costs in the current year (that could impact performance) and prevent transaction costs from impacting remaining investors in the next year. When closing funds or managed accounts, managers should pay careful attention to the liquidation procedures in the fund constituent documents and the managed account agreement.

NAV Triggers and Waivers. Managers should promptly seek waivers of any applicable termination events specified in a fund’s International Swaps and Derivatives Association (“ISDA”) or other counterparty agreement that may be triggered by redemptions, performance, or a combination of both at the end of the year (NAV declines are common counterparty agreement termination events).

Fund Expenses. Managers should wrap up all fund expenses for 2021 if they have not already done so. In particular, managers should contact their outside legal counsel to obtain accurate and up to date information about legal expenses for inclusion in the NAV for year-end performance.

Electronic Schedule K-1s. The Internal Revenue Service (“IRS”) authorizes partnerships and limited liability companies taxed as partnerships to issue Schedule K-1s to investors solely by electronic means, provided the partnership has received the investors’ affirmative consent. States may have different rules regarding electronic K-1s, and partnerships should check with their counsel whether they may be required to send hard copy state K-1s. Partnerships must also provide each investor with specific disclosures that include a description of the hardware and software necessary to access the electronic K-1s, how long the consent is effective, and the procedures for withdrawing the consent. If you would like to send K-1s to your investors electronically, you should discuss your options with your service providers.

“Bad Actor” Recertification Requirement. A security offering cannot rely on the Rule 506 safe harbor from SEC registration if the issuer or its “covered persons” are “bad actors.” Fund managers must determine whether they are subject to the bad actor disqualification any time they are offering or selling securities in reliance on Rule 506. The SEC has advised that an issuer may reasonably rely on a covered person’s agreement to provide notice of a potential or actual bad actor triggering event pursuant to contractual covenants, bylaw requirements, or undertakings in a questionnaire or certification. However, if an offering is continuous, delayed or long-lived, issuers must periodically update their factual inquiry through a bring-down of representations, questionnaires, and certifications, negative consent letters, reexamination of public databases or other means, depending on the circumstances. Fund managers should consult with counsel to determine how frequently such an update is required. As a matter of practice, most fund managers should perform these updates at least annually.

U.S. FATCA. Funds should monitor their compliance with the U.S. Foreign Account Tax Compliance Act (“FATCA”). Generally, U.S. FATCA reports are due to the IRS on March 31, 2022, or September 30, 2022, depending on where the fund is domiciled. However, reports may be required by an earlier date for jurisdictions that are parties to intergovernmental agreements (“IGAs”) with the U.S. Additionally, the U.S. may require that reports be submitted through the appropriate local tax authority in the applicable IGA jurisdiction, rather than the IRS. Given the varying U.S. FATCA requirements applicable to different jurisdictions, managers should review and confirm the specific U.S. FATCA reporting requirements that may apply. As a reminder, we strongly encourage managers to file the required reports and notifications, even if they already missed previous deadlines. Applicable jurisdictions may be increasing enforcement and monitoring of FATCA reporting and imposing penalties for each day late.

CRS. Funds should also monitor their compliance with the Organisation for Economic Cooperation and Development’s Common Reporting Standard (“CRS”). All “Financial Institutions” in the British Virgin Islands (“BVI”) and the Cayman Islands must register with the respective jurisdiction’s Tax Information Authority and submit various reports with the applicable regulator via the associated online portal. Managers to funds domiciled in other jurisdictions should also confirm whether any CRS reporting will be required in such jurisdictions and the procedures required to enroll and file annual reports. We recommend managers contact their tax advisors to stay on top of the U.S. FATCA and CRS requirements and avoid potential penalties.

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Annual Management Company Matters

Management Company Expenses. Managers who distribute profits annually should attempt to address management company expenses in the year they are incurred. If ownership or profit percentages are adjusted at the end of the year, a failure to manage expenses could significantly impact the economics of the partnership or the management company.

Employee Reviews. An effective annual review process is vital to reduce the risk of employment-related litigation and protect the management company in the event of such litigation. Moreover, it is an opportunity to provide context for bonuses, compensation adjustments, employee goals, and other employee-facing matters at the firm. It is never too late to put an annual review process in place.

Compensation Planning. In the fund industry, and the financial services industry in general, the end of the year is the appropriate time to make adjustments to compensation programs. Because much of a manager’s revenue is tied to annual income from incentive fees, any changes to the management company structure, affiliated partnerships, or any shadow equity programs should be effective on the first of the year. Partnership agreements and operating agreements should be appropriately updated to reflect any such changes.

Insurance. If a manager carries director and officer or other liability insurance, the policy should be reviewed annually to ensure that the manager has provided notice to the carrier of all claims and all potential claims. Newly launched funds should also be added to the policy as necessary.

Other Tax Considerations. Fund managers should assess their overall tax position and consider several steps to optimize tax liability. Managers should also be aware of self-employment taxes, which can potentially be minimized by structuring the investment manager as a limited partnership. Several steps are available to optimize tax liability, including: (i) changing the incentive fee to an incentive allocation; (ii) use of stock-settled stock appreciation rights; (iii) if appropriate, terminating swaps and realizing net losses; (iv) making a Section 481(a) election under the Internal Revenue Code of 1986, as amended (“Code”); (v) making a Section 475 election under the Code; and (vi) making charitable contributions. Managers should consult legal and tax professionals to evaluate whether any of these options are appropriate.

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Regulatory & Other Items from 2021

SEC Updates.

SEC Issues Risk Alert on Investment Advisers’ Fee Calculations. The SEC’s Division of Examinations has recently completed a review of 130 SEC-RIAs and published its findings in this November 2021 Risk Alert. The review focused on three key areas: (i) the accuracy of fees charged by investment advisers; (ii) the accuracy and adequacy of investment adviser disclosures; and (iii) the effectiveness of investment advisers’ compliance programs and the accuracy of their books and records. The risk alert notes key mistakes such as the failure to maintain written billing policies and inaccurate financial statements caused by errors in accounting procedures. Though mistakes such as these are not new to the industry, this report provides a reminder to investment advisers to consistently review and improve their policies and disclosures pertaining to client fees.

SEC Proposes Revisions to Electronic Recordkeeping Requirements. The SEC has published proposed amendments to electronic recordkeeping rules applicable to broker-dealers, as well as security-based swap dealers (“SBSDs”) and major security-based swap participants (“MSBSPs”) that are not also registered as broker-dealers (collectively, “SBS Entities”). Currently, broker-dealers, are required to maintain electronic records in a “non-rewritable, non-erasable format” while SBS Entities are not subject this requirement. However, the new proposal provides for an audit trail alternative whereby records may be preserved “in a manner that permits the recreation of an original record if it is lost, over-written or erased.” Under the new rule, SBS Entities without a prudential regulator would also be required to utilize one of the two authorized recordkeeping methods. The proposed amendment, if enacted, would apply only to newly created records and not to records created prior to the amendment. Applicable entities should keep an eye out for the final rule to ensure their electronic recordkeeping policies and procedures are appropriately updated.

SEC Proposes Substantial Reporting and Disclosure of Securities Lending Information. The SEC has published and requested comment on proposed Rule 10c-1 under the Exchange Act. The proposed rule would require all lenders of securities to provide certain information and material terms related to securities lending transactions. The proposal covers loans of any “security” as defined in Section 3(a)(10) of the Exchange Act, applying to both equity and debt securities. The reporting requirements would also apply to “lending agents,” in situations where securities are lent through an intermediary, and any broker dealers acting as “reporting agents” . Certain of the information provided, including, but not limited to, the legal name and legal entity identifier of the issuer, the securities’ ticker symbol, and the date and time the loan was effected, would be made public. Questions remain regarding the scope of the information to be collected, as well as how lending of certain digital assets that are classified as “securities” may be impacted by this proposal. There are various activities that involve the lending of digital assets, such as yield farming, which could be subject to the proposed rule. The SEC has not yet commented on the effect of Rule 10c-1 on digital asset lending, but we will continue to monitor this matter for any updates or related guidance.

New Qualified Client Standard in Effect. As a reminder, the SEC revised dollar thresholds for Qualified Clients went into effect August 16, 2021. The “net worth” threshold increased from $2,100,000 to $2,200,000 and the dollar amount for the “assets-under-management” test was raised from $1,000,000 to $1,100,000. Please refer to our previous update for more information.

SEC Adopts Marketing Rule. As a reminder, the SEC adopted new marketing rules for investment advisers that will drastically overhaul and replace the prior cash solicitation and advertising rules applicable to investment advisers, their marketing materials, and their advertising practices to replace. The compliance period for these new marketing rules begins on November 4, 2022. Please refer to our previous update for more information.

Digital Asset Updates.

The President’s Working Group on Financial Markets Issues Risk Assessment on Stablecoins. An interagency report released on November 1, 2021 outlines the risks that stablecoins pose to the safety and efficiency of the financial market, as well as recommendations for congressional and agency action intended to address such risks. The primary concerns raised are: (i) the loss of value; (ii) payment system risks; and (iii) systemic risks, such as rapid scaling or failures by key participants. The recommendations include requiring stablecoin issuers to be insured as depository institutions, implementation of federal oversight regimes for digital wallet providers, limiting stablecoin issuers’ and digital wallet providers’ ability to affiliate with commercial entities, and limiting their use of users’ transaction data. The report further recommends that federal agencies, including the SEC, CFTC, and the Financial Crimes Enforcement Network (“FinCEN”), use their oversight power where appropriate and that the Financial Stability Oversight Council (“FSOC”) designate certain stablecoin arrangement activities as, or as likely to become, systemically important payment, clearing, and settlement (“PCS”) activities, enabling agencies to establish appropriate risk-management standards for institutions engaging in PCS activities.

The Treasury Issues Reports Addressing Threats Linked to Virtual Currency Transactions and Ransomware Payments. The U.S. Department of the Treasury’s (“Treasury”) Office of Foreign Assets Control (“OFAC”) issued guidance on October 15, 2021 regarding the application of sanctions laws to virtual currency activity and best practices for compliance with such sanctions regulations. OFAC also issued an updated advisory report discouraging private companies and individuals from making ransomware or extortion payments and highlighting risks to companies that facilitate such payments on behalf of the victim, such as the risk of directly or indirectly engaging in a prohibited transaction with individuals or entities on OFAC’s Specifically Designated Nationals and Blocked Persons List. OFAC recommends companies implement sanctions compliance programs to mitigate exposure to related violations, and notes that such programs are taken into consideration in the event of a violation.

South Korea to Introduce 20% Tax on Crypto Trading Profits. As a reminder, South Korea will implement a 20% capital gains tax on Bitcoin (BTC) and cryptocurrency profits starting January 1, 2022.

Offshore Updates.

BVI’s New Data Privacy Law in Effect. A new BVI statute, the Data Protection Act, 2021 (“DPA”) went into effect on July 9, 2021. The DPA applies to all BVI companies, limited partnerships, other entities, such as data controllers and non-BVI entities that use data processing equipment in the BVI or use the BVI for data transmission. The DPA is modeled after the European Union’s General Data Protection Regulation (“GDPR”) and requires an individual or entity’s consent prior to data processing. Additionally, the law requires that data controllers implement data protection safeguards before they transfer personal data out of the BVI. Altogether, the DPA aligns with the international movement towards stringent data privacy laws as governments seek more accountability from companies managing personal data. Managers with BVI funds should consult offshore counsel to ensure compliance with the DPA.

Other Matters.

Treasury Form SHC Due by Owners of Foreign Securities on December 31, 2021. Investment advisers, managers, administrators, and fund sponsors that are involved in master-feeder structures established both inside and outside of the U.S. should report such interests to the Treasury by filing a Form SHC no later than December 31, 2021. This includes a U.S. feeder fund, created by a U.S. investment manager / fund sponsor (“IM / FS”) entity, that holds, as a portfolio investment, interests in a foreign master fund. The portfolio investment by the U.S. feeder fund will need to be reported by the IM / FS as the representative of the U.S. feeder. Conversely, if the IM / FS is a foreign entity, the U.S. feeder fund will need to self-report the ownership interest in the foreign master fund as ownership of foreign equity on the Form SHC. The Treasury provides further directions regarding how to know if you must report ownership of such foreign securities.

European Union Announces Delay of Sustainable Finance Disclosure Regulation (“SFDR”) Rollout. As a reminder, the EU’s SFDR will now be implemented on July 1, 2022, instead of January 1, 2022. The SFDR is a series of disclosure requirements for asset managers intended to increase the transparency of a fund’s sustainability and environmental impact. Please refer to our previous update for more information.

California Lenders’ License Update. As a reminder, the DFPI announced that starting on October 1, 2021 applications under California Financing Law (“CFL”) must be submitted through the Nationwide Multistate System and Registry (“NMLS”). Existing licenses must be transitioned onto NMLS by December 31, 2021. Please refer to our previous update for more information.

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Compliance Calendar

Please note the following important dates as you plan your regulatory compliance timeline for the coming months: 

Deadline	Filing
December 13	Deadline for paying annual IARD charges and state renewal fees, through IARD.
December 16	Cayman Islands FATCA and CRS reporting deadlines.
December 26	Last day to submit form filings via IARD prior to year-end.
December 31	Review RAUM to determine 2021 Form PF filing requirement.
December 31	Small and mid-sized registered CPOs must submit a pool quarterly report (CPO-PQR).
December 31	Cayman funds regulated by CIMA that intend to de-register (i.e. wind down or continue as an exempted fund) should do so before this date to avoid 2022 CIMA fees.
January 11	Amended Form 13H filing due if any information on the previously filed Form 13H became inaccurate during the prior quarter.
January 15	Quarterly Form PF due for large liquidity fund advisers (if applicable).
January 31	“Annex IV” AIFMD filing.
February 16	Quarterly Form 13F due.
February 16	Annual Form 13H updates due.
March 1	Quarterly Form PF due for larger hedge fund advisers (if applicable).
March 1	Deadline for annual affirmation of CFTC exemptions.
March 31	Deadline to update and file Form ADV Parts 1, 2A &2B.
March 31	Cayman Islands CRS Compliance Form deadline.
Periodic	Fund Managers should perform “Bad Actor” certifications annually.
Periodic	Form D and Blue Sky Filings should be current.
Periodic	CPO/CTA Annual Questionnaires must be submitted annually, and promptly upon material information changes, through NFA Annual Questionnaire system.

Please contact us with any questions or for assistance with any of the above topics.

Sincerely,

Karl Cole-Frieman, Bart Mallon, Lilly Palmer, David Rothschild, & Scott Kitchens

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Cole-Frieman & Mallon LLP is a premier boutique investment management law firm, providing top-tier, responsive, and cost-effective legal solutions for financial services matters. Headquartered in San Francisco, Cole-Frieman & Mallon LLP services both start-up investment managers, as well as multi-billion-dollar firms. The firm provides a full suite of legal services to the investment management community, including hedge fund, private equity fund, venture capital fund, mutual fund formation, adviser registration, counterparty documentation, SEC, CFTC, NFA and FINRA matters, seed deals, hedge fund due diligence, employment and compensation matters, and routine business matters. The firm also publishes the prominent Hedge Fund Law Blog, which focuses on legal issues that impact the hedge fund community. For more information, please add us on LinkedIn and visit us at colefrieman.com.