SEC Proposes New IA and Hedge Fund Registration Rules

Seeks Public Comment on Proposed Regulations

On November 19, the SEC released proposed rules with respect to the new hedge fund registration requirement under the Dodd-Frank act.  The major proposals include the following:

  1. Rules with respect to the manner and process of registration of hedge fund and private equity fund managers.
  2. Reporting requirements for registered hedge fund and other private fund managers.  This will include:
    • Basic organizational and operational information about the funds they manage, such as information about the amount of assets held by the fund, the types of investors in the fund, and the adviser’s services to the fund.
    • Identification of five categories of “gatekeepers” that perform critical roles for advisers and the private funds they manage (i.e., auditors, prime brokers, custodians, administrators and marketers).
  3. Reporting requirements for non-registered private fund managers (including venture capital funds).  This will include:
    • Basic identifying information for the adviser and the identity of its owners and affiliates.
    • Information about the private funds the adviser manages and about other business activities that the adviser and its affiliates are engaged in that present conflicts of interest that may suggest significant risk to clients.
    • The disciplinary history of the adviser and its employees that may reflect on their integrity.
    • Exempt reporting advisers would file reports on the Commission’s investment adviser electronic filing system (IARD), and these reports would be publicly available on the Commission’s website.
  4. Defining the term “venture capital fund” and the term “foreign private adviser”.
  5. Providing guidance on SEC to state registration for managers who will no longer be allowed to register with the SEC due to increase in registration asset threshold

We will have the opportunity to fully review these proposals over the next few days and will be providing a report on the proposed regulations and will outline the comments we intend to send to the SEC.  Public comments on the proposal will be due to the Commission in early January 2011.

The SEC summary of the proposed regulations can be found discount viagra soft gels here.  The full texts of the two sets of proposals are below:


Bart Mallon, Esq. runs the hedge fund law blog and provides registration and hedge fund compliance services to managers through Cole-Frieman & Mallon LLP.  He can be reached directly at 415-868-5345.

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