Tag Archives: hedge fund registration

Connecticut Issues Orders Regarding Investment Adviser Registration

Three Orders Focused on New Hedge Fund Regulations

On June 11, 2011, Connecticut Department of Banking issued three orders relating to Connecticut investment adviser registration requirements in response to the SEC issuing final hedge fund registration regulations required by the Dodd-Frank Act.  The orders (1) create a registration transition period for previously exempt advisers, (2) provide several new exemptions from state registration and (3) define the term “client” for the purposes of Connecticut’s de minimus exemption.

First Order – State Registration Timeline

The first order establishes a state registration timeline for Connecticut advisers affected by the Dodd-Frank Act.  Under this order the following timelines will be in effect:

Investment advisers currently registered with the SEC with assets under management of less than $90 million as of March 30, 2012, will have until June 28, 2012 to withdraw from registration with the SEC and register as an investment adviser in CT.

Investment advisers who had relied on the repealed “private adviser” exemption under Rule 203(b)(3) will have until March 30, 2012 to either register with Connecticut or to register with the SEC and make a notice filing with Connecticut.

Investment advisers who are not eligible for SEC registration or for either of the above deferrals and new advisers starting their advisory business after July 21, 2011 must continue to comply with applicable Connecticut registration and notice filing requirements.

This first order can be found here.

Second Order – Exemptions from Connecticut IA Registration

Previously, Connecticut provided an exemption from investment adviser registration for those hedge fund managers who were located in Connecticut and had more than $25M in assets under management and managed less than 15 hedge funds. The new order repeals this previous exemption and adopts the same exemptions from Connecticut state registration as have been adopted by the SEC.

Accordingly, the following investment advisers are exempt from registration in Connecticut:

  • Foreign private advisers
  • Investment advisers that are registered with the CFTC
  • Investment advisers to small business investment companies
  • Investment advisers to venture capital funds
  • Investment advisers solely to private funds with assets under management of less than $150 million.

Some of these exempted advisers will still be subject to various reporting and recordkeeping requirements by the SEC and may need to make notice filings and/or reports available to Connecticut.

It is important for managers to understand that the above extensions don’t apply to investment advisers and fund managers commencing business on or after July 21, 2011. Those investment advisers and others that don’t fall into the described exemptions remain subject to applicable registration and notice filing requirements in Connecticut.

The second order can be found here.

Third Order – Definition of “Client” for Connecticut’s De Minimus Exemption

To further conform its regulations to the new SEC rules, Connecticut has adopted the definition of “client” in accordance with the Investment Advisers Act Rule 202(a)(30)-1 for Connecticut’s de minimus exemption. The de minimus exemption allows an investment adviser to not register with the state if the investment adviser:

  1. does not have a place of business in Connecticut AND
  2. during the preceding 12 month period had fewer than 6 “clients” who are residents of Connecticut

Under the new Connecticut rule, a single “client” generally means:

  1. a natural person, family members of the same household and accounts for such persons OR
  2. an entity (such as a hedge fund) to which the investment adviser provides investment advice based on the entity’s investment objectives (two entities with exactly the same ownership can, together, be counted as a single client)
The third order can be found here.


The new SEC rules implementing investment adviser regulation amendments under the Dodd-Frank Act have created new compliance and regulatory issues for investment advisers. States will need to amend their rules to coordinate their regulatory regime with the new changes. We expect to see similar releases from other states in the coming weeks, and will be providing updates as appropriate.


Cole-Frieman & Mallon LLP provide advice with respect to hedge fund formation as well as investment adviser registration and compliance.  Bart Mallon can be reached directly at 415-868-5345.

New York Hedge Fund Manager Registration Post Dodd-Frank Act

SEC Releases Information on Mid-Sized Advisers – New York Managers may be Required to Register with SEC

Currently managers with a place of business in New York are not required to register as investment advisers at the state level with the New York Department of State.  Until the Dodd-Frank Act was passed last year, these managers also were exempt from registration with the SEC because of the old Section 203(b)(3) exemption.  After the Dodd-Frank Act repealed the 203(b)(3) exemption, it was unclear how certain managers (like those managers with a place of business in New York) would be regulated.  Recently the SEC passed final hedge fund registration regulations which, among other things, clarifies how certain mid-sized hedge fund managers will be regulated.  The SEC also recently released a FAQ on how the mid-sized advisers.  The import of the Dodd-Frank Act and the new regulations means that certain New York hedge fund managers will be required to register as investment advisers with the SEC.

Mid-Sized Adviser Overview

A mid-sized adviser is generally an investment adviser with between $25M and $100M of AUM.  Mid-sized advisers are not allowed to register with the SEC unless the mid-sized adviser is located in New York state or Wyoming, in which case they will be required to register with the SEC.  Those mid-sized advisers who are currently registered with the SEC (under the applicable regulations effective prior to the Dodd-Frank Act) will be required to “switch” to state registration by June 28, 2012.  Any mid-sized adviser starting their business after July 21, 2011 will be required to register with the state securities commission or with the SEC if they are in New York or Wyoming.  More technical guidance on accomplishing the “switch” from SEC to state registration is expected to be provided by the SEC and various state regulators in the coming months.

Overview of IA Registration Requirement for New York Managers

Based on the new federal regulations, managers with a principal place of business in New York will be subject to registration/exemption as follows:

Manager provides advice to hedge funds only –> has AUM of between $25M and $150M –> no registration with SEC or state (but will be an Exempt Reporting Adviser required to submit a truncated Form ADV by March 30,2012)

Manager provides advice to hedge funds only –> has AUM of over $150M –> registration with SEC required

Manager provides advice to hedge funds and separate accounts –> has AUM of at least $25M –> registration with SEC required

Managers should note that if they are initially commencing operations they will need to follow the new regulations immediately.

Next Steps for New York Managers

New York based managers who fall within the Mid-Sized category and will need to start making preparations with respect to registering as an investment adviser with the SEC.  The deadline for registration with the SEC will be March 30, 2012.

The SEC FAQ on Mid-Sized Advisers is reprinted in full below and can be found



Division of Investment Management:

Frequently Asked Questions Regarding Mid-Sized Advisers

What is a “mid-sized adviser”?

A “mid-sized adviser” is an investment adviser that has between $25 million and $100 million of assets under management.

Are mid-sized advisers required to register with the Securities and Exchange Commission?

After July 21, 2011, a mid-sized adviser must register with the Securities and Exchange Commission if it:

i. is not required to be registered as an adviser with the state securities authority in the state where it maintains its principal office and place of business; or

ii. is not subject to examination as an adviser by the state where it maintains its principal office and place of business.

A mid-sized adviser that does not meet either one of these two requirements is prohibited from registering as an adviser with the Commission after July 21, 2011, but will have to register with the state securities authorities. There are a few exceptions to the general prohibition from SEC registration in rule 203A-2, such as for certain multi-state investment advisers and pension consultants. In addition, a mid-sized adviser that is required to register with the SEC, may elect to not register if it can rely on an exemption from registration, such as those for certain advisers to private funds.

In which states would a mid-sized adviser not be “subject to examination” by the state securities authority?

New York or Wyoming.

A mid-sized adviser with its principal office and place of business in either of those states is not “subject to examination” by the state securities authority and would have to register with the SEC. A mid-sized adviser with its principal office and place of business in any other state is “subject to examination.” This information will be updated promptly upon notification by a state securities authority of any change to examination status.

How does a mid-sized adviser determine if it is “required to be registered” in the state where it maintains its principal office and place of business?

A mid-sized adviser should consult the investment adviser laws or the state securities authority for that state to determine if it is required to register as an investment adviser in that state.

When is a mid-sized adviser that is no longer eligible for Commission registration required to switch to state registration?

A mid-sized adviser registered with the Commission as of July 21, 2011 must remain registered with the Commission until January 1, 2012 (unless an exemption from Commission registration is available). Each adviser registered with the Commission on January 1, 2012 must file an amendment to its Form ADV no later than March 30, 2012, which for most advisers will be their annual updating amendment. A mid-sized adviser that is no longer eligible for Commission registration will need to be registered with the state securities authorities by June 28, 2012, and must withdraw its Commission registration by filing Form ADV-W, indicating it is filing a “partial withdrawal,” no later than that date.

The adopting release amending Form ADV, dated June 22, 2011 (the “Adopting Release”) can be found at:http://www.sec.gov/rules/final/2011/ia-3221.pdf .

Amended Form ADV can be found at:http://www.sec.gov/rules/final/2011/ia-3221-appd.pdf .

Amended Form ADV instructions can be found at:http://www.sec.gov/rules/final/2011/ia-3221-appa.pdf andhttp://www.sec.gov/rules/final/2011/ia-3221-appb.pdf .


Cole-Frieman & Mallon LLP is a law firm which provides advice hedge fund managers on state registration and compliance matters.  Bart Mallon can be reached directly at 415-868-5345; Karl Cole-Frieman can be reached at 415-352-2300.

Hedge Fund Registration Rules Finalized

Registration required by March 30, 2012

We are obviously a bit late on reporting that the hedge fund registration regulations were finalized by the SEC recently (see releases at end of the post).  We are not going to detail all aspects of the regulations in this post, but we will be examining some of the more important issues related to the release over the coming weeks and months.

We do want to provide a quick overview of some of the more important items with respect to the new regulations.  These include:

  1. registration for many hedge fund managers will be required by March 30, 2012 [note: managers will need to file Form ADV with the SEC no later than February 14, 2012 to meet this deadline]
  2. Form ADV has been amended in a number of ways which provide more information regarding a fund’s activities and counterparties
  3. Exempt Reporting Advisers (“ERAs”) will need to complete and file a truncated version of Form ADV by March 30, 2012 [note: ERAs will be subject to recordkeeping requirements and will be subject to SEC examination]
  4. many currently registered fund managers will need to switch from SEC registration to state registration during the first part of 2012

IA Registration Overview and Exemptions

After the passage of the Dodd-Frank Act it was clear than many fund managers would be required to register as investment advisers with the SEC.  In general the following are the registration requirements/exemptions for asset managers:

  • managers to only hedge funds (no managed accounts) must register as an IA with the SEC if Regulatory AUM (discussed below) is over $150M
  • managers to hedge funds and managed accounts must register as an IA with the SEC if Regulatory AUM is over $100M
  • mid-sized advisers ($25M to $100M) will be subject to state registration, if applicable [note: some mid-sized advisers will be subject to SEC registration regardless]
  • managers to only VC funds are exempt from registration;
    • VC funds may have up to 20% of their assets in non-VC investments
    • while managers to VC funds will not be required to register as IAs with the SEC, they will still be Exempt Reporting Advisers and will thus need to completed the truncated Form ADV by March 30, 2012
  • non-U.S. managers who have a place of business in the U.S. and have U.S. clients (either directly or as investors in their fund) will generally be required to register as an IA with the SEC or will be deemed to be an ERA [note: non-U.S. managers with U.S. clients or investors will only be exempt from IA registration with the SEC in only limited circumstances]
  • private equity fund managers are generally going to be treated the same as hedge fund managers according to these regulations

Other Items

The following are some of the important items from the releases:

  • Form PF – Release 3221 makes specific reference to a “Form PF release” which indicates that the SEC will be moving forward with the highly controversial reporting form.
  • Regulatory AUM – a new definition for AUM called regulatory assets under management will be used when determining the thresholds for registration. The big issue is that the definition will include leverage (gross assets) and will also include uncalled capital commitments.  The Release 3221 essentially states that the new Regulatory AUM definition is necessary for more consistent

    reporting of AUM and because Form PF will essentially rely on the new definition.

  • Buffer for Mid-Sized Advisers – there is a buffer zone around the $100M mark for certain managers.  This buffer is put into place so that managers do not have to continually switch to and from SEC registration as AUM increases or decreases.  The buffer is $10M each way meaning a manager will not be required to register with the SEC until AUM reaches $110M and a SEC registered manager would not need to de-register or switch to state registration until the manager had less than $90M AUM.
  • Family Office – family offices are exempt from SEC IA registration.  The SEC defined the term “family office” (see Release IA-3220).

The SEC press release announcing the new regulations and providing an overview of the new regulatory requirements can be found here.

The full releases are below:

  • Release IA-3222 [Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers]
  • Release IA-3221 [Rules Implementing Amendments to the Investment Advisers Act of 1940]
  • Release IA-3220 [Family Offices]


Cole-Frieman & Mallon LLP provides registration, compliance and other legal services for hedge fund managers.  Bart Mallon can be reached directly at 415-868-5345; Karl Cole-Frieman can be reached at 415-352-2300.


SEC Open Meeting re: Hedge Fund Registration

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.


SEC Announces Open Meeting on Hedge Fund Regulations

SEC Considers Whether to Adopt Registration Requirement

Yesterday the SEC announced that they will conduct an Open Meeting on June 22 to determine whether to adopt the new hedge fund registration requirements and related rules. At the Open Meeting the SEC is expected to delay implementation of the regulations until next year.   While the SEC announced in a letter to NASAA that they would likely extend the registration deadline, there has been no official action on this issue.  This has left managers (and lawyers and compliance personnel) unsure of how to proceed.  We will know more after the June 22 meeting.

The notice of the Open Meeting, reprinted below in full, can be found here.  Hat tip to Doug Cornelius at Compliance Building for publishing this story earlier today.


Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Pub. L. 94-409, that the Securities and Exchange Commission will hold an Open Meeting on June 22, 2011 at 10:00 a.m., in the Auditorium, Room L-002.

The subject matters of the Open Meeting will be:

Item 1: The Commission will consider whether to adopt new rules and rule amendments under the Investment Advisers Act of 1940 to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These rules and rule amendments are designed to gi

ve effect to provisions of Title IV of the Dodd-Frank Act that, among other things, increase the statutory threshold for registration of investment advisers with the Commission, require advisers to hedge funds and other private funds to register with the Commission, and address reporting by certain investment advisers that are exempt from registration.

Item 2: The Commission will consider whether to adopt rules that would implement new exemptions from the registration requirements of the Investment Advisers Act of 1940 for advisers to venture capital funds and advisers with less than $150 million in private fund assets under management in the United States. These exemptions were enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new rules also would clarify the meaning of certain terms included in a new exemption for foreign private advisers.

Item 3: The Commission will consider whether to adopt a rule defining “family offices” that will be excluded from the definition of an

investment adviser under the Investment Advisers Act of 1940.

At times, changes in Commission priorities require alterations in the scheduling of meeting items.

For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact:

The Office of the Secretary at (202) 551-5400.

Elizabeth M. Murphy


June 8, 2011


Bart Mallon is an attorney with a practice focused on hedge funds and investment adviser registration.  He can be reached directly at 415-868-5345.


California Extends IA Exemption for Hedge Fund Managers

Will Wait for SEC Final Registration Regulations to Propose New Rules

California currently has an exemption from the registration requirements for certain fund managers with more than $25M of AUM (Rule 260.204.9).  Back in March California requested input from the investment management community on how they might change the registration requirements when the SEC finalizes its IA registration rules as a result of the Dodd-Frank act.  At that time it was expected that the SEC would finalize its IA registration rules in time for managers to register before the July 21, 2011 registration deadline.  However, the SEC subsequently indicated that it would likely extend the registration deadline until the first quarter of 2012.  From this story by IA Watch, it looks like the Division of Investment Management is moving closer to officially moving the registration deadline to next year.

Because of the uncertaintly of rulemaking at the federal level, the states are left in limbo as to how to proceed with respect to fund managers who may or may not fit under certain exemptions after the federal laws

become effective (even if new federal rules are not yet effective).  California is addressing this exact scenario in a letter it addressed the investment management community on May 13, 2011.  The letter states:

“some uncertainty may exist about the need to become registered after July 21, 2011, for California IAs who are currently unregistered, in reliace on the existing exemption set forth in Rule 260.204.9.”

The letter goes on to state:

“The Department will soon issue emergency regulations to address this potential uncertainty.  These emergency regulations will amend Rule 260.204.9, but have the effect of preserving the status quo.  Therefore, California IAs who currently rely on the exemption from registration for private advisers, will be able to continue to rely on that exemption until such time as the Deparment adopts final rules related to private fund advisers.”

This is good news for current managers located in California and relying on the exemption from registration in California.  We believe that other states (such as Connecticut which has a similar exemption) will soon follow California and release emergency regulations to deal with issues related to the failure of the SEC to finalize the IA registration regulations.  Until the SEC does issue final regulations, it would seem that states would (or probably should) stop proposing changes to state regulations (see previous post on Massachusetts proposed changes).


Cole-Frieman & Mallon LLP is a law firm focused on the investment management industry.  The firm provides investment adviser registration services to hedge funds and other investment managers.  Bart Mallon can be reached directly at 415-868-5345.


Compliance Update for California Hedge Funds – Presentation

As part of the Hedge Fund Networking Summit Webcast Series, Bart Mallon of Mallon P.C. led an hour long presentation on compliance matters for California based hedge fund managers.  The presentation covered the following topics:

  • New SEC and CA Hedge Fund Registration Requirements
  • Registration Overview & Major Issues
  • Compliance Overview
  • Discussion of Other Current Regulatory Issues

There were of number of questions asked by the audience regarding many of the new compliance requirements for registered managers.  We have had good experience with the following groups:

If you attended the event and have follow up generic propecia online pharmacy questions, please feel free to contact us and we will try to get back to you as soon as possible.  The full powerpoint can be downloaded here: CAHF Powerpoint (April 2011) Final

Many thanks to Ron Niemaszyk of Patke & Associates for moderating the event.


Cole-Frieman & Mallon LLP provides investment adviser registration & compliance services to hedge fund managers.  For more information, please call Bart Mallon at 415-868-5345.


SEC May Extend IA Registration Deadline

In a letter to the NASAA today the SEC stated that they may extend the final deadline for IA registration under

buy propecia online
the Dodd-Frank Act.  The reason for the extension is to give companies enough time to go through the registration process once final regulations are promulgated.  The SEC stated that it intends to issue the final regulations before July 21, 2011.

More information on this letter to be forthcoming.


Cole-Frieman & Mallon LLP is a boutique hedge fund law firm which provides investment adviser registration services to SEC and state registered hedge fund managers.  Bart Mallon can be reached directly at 415-868-5345.


California Requests Input on IA Exemption Changes

Seeks to Raise IA Exemption Threshold to $100MM AUM

In an Invitation for Comments released today, California officially seeks comments to change its rules with respect to hedge fund managers and a certain exemption from investment adviser registration.  California currently exempts from registration those investment advisers with a place of business in California and more than $25MM of AUM (please see our post on the California IA exemption).  California may, however, increase the asset threshold for the exemption because of the changes under the Dodd-Frank Act.

Prior to Dodd-Frank, hedge fund managers could not register with the SEC unless they had $25MM of AUM.  Now, the threshold will be $100MM of AUM.  Accordingly, some states are proposing to amend current laws so they reflect the changes at the federal level.  The invitation for comments seems to be based on a recent NASAA proposed hedge fund model rule which would require all non-SEC registered hedge fund managers (to Section 3(c)(1) funds) to register with the state securities commission.   The proposed model rule was a natural step for NASAA to take considering that the Dodd-Frank Act did, with respect to some states, leave a regulatory gap.  Connecticut is another state which has an exemption for managers with more than $25MM of AUM (please see our post on the Connecticut IA exemption).

California Invitation

California provided the following as a reason for the invitation:

As a result of Dodd-Frank, on July  21, 2011, Section  260.204.9 will no longer provide an exemption from California licensing requirements.  In anticipation of these changes, the California Corporations Commissioner will be amending Section 260.204.9 to reflect the changes in the corresponding federal rules.  The Commissioner seeks input on the issue of how best to regulate advisers to alternative investment vehicles, while balancing the regulatory burden on such advisers, with any corresponding investor protections issues.

The following are the items which California asks interested parties to discuss:

1.  To avoid the “retailization” of private alternative investment funds, should the exemption apply exclusively to advisers to Section 3(c)(7) funds (i.e., not to Section 3(c)(1) funds)?
2.  Should all persons investing in a Section 3(c)(1) fund be required to be qualified clients? If so, should the Department issue an order that “grandfathers” Section 3(c)(1) funds organized prior to July 21, 2010?
3. Should the proposed statutory disqualification provisions be expanded to include additional factors?
4.  Should the proposed asset under management threshold (AUM) be a different amount than that set forth in the proposed rule (i.e. $100 million)?  If so, what is the basis for a different threshold?
5.  Are there criteria other than AUM that the Commissioner should consider to determine whether an adviser should be exempt (e.g., the fund is subject to an annual audit)?
6.  Should the Department’s definition of venture capital company/fund conform to the proposed SEC definition?
7.  Should the Department adopt the North American Securities Administrators Association (NASAA) proposed model rule for an exemption for Private Fund Advisers?

What this means

Right now this does not mean anything.  The division will take comments into consideration when they begin to draft the proposed amendment to the current hedge fund registration exemption.  After the proposed amendment is drafted, there will be a public comment period prior to any new regulation being officially adopted.  This means that interested parties will have the ability to have their comments heard now and after a proposed rule has been announced.  Comments on this particular release are due by March 28, 2011.


Bart Mallon is an attorney who works with both state and SEC registered fund managers.  His firm, Cole-Frieman & Mallon LLP, routinely provides regulatory and compliance services to registered investment advisers.  He can be reached directly at 415-868-5345.

2011 Final Renewal Statement for Registered Investment Advisers

As we noted previously, registered investment advisory firms and firm representatives must renew their registration annually by paying a fee to FINRA.  In November FINRA issued a Preliminary Renewal Statement for each registered IA firm which stated the amount of renewal fees which were due by December 13, 2010.

While most firms should have by now paid the preliminary statement, each firm can now review their Final Renewal Statement.  The final statement is now available through the IARD system and reflects the firm’s and representatives’ final registration status as of December 31, 2010.  The final statement also reflects any adjustments as a result of registration approvals or terminations since the preliminary statement was issued. Firms and representatives should check their final statement to ensure all renewal fees are paid in full.  If 40 mg levitra the firm has any amounts due, payment should be made by February 4, 2011.

Below is information on how to access your Final Renewal Statement.

Accessing Your Final Renewal Statement

To check your firm’s Final Renewal Statement, follow these instructions:

  1. Log onto IARD here.
  2. Enter your firm’s ID and password.
  3. Review and accept the terms and conditions.
  4. Under the “Accounting” tab at the top of the page, select “Renewal Account.”
  5. Under the “Renewal Statement” link in the “Accounting” section, you can retrieve the Final Renewal Statement, which will state “Paid in Full” or “Amount Due.”

If an amount is due, the balance must be received by FINRA and posted to the Renewal Account by February 4, 2011.  Any renewal overpayments should have automatically been transferred to your Daily Account.

Additional information about the Final Renewal Statement can be found here.

If you have any questions regarding your renewal statement or any other investment adviser registration issue, please feel free to contact Mallon P.C. for more information.


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