Tag Archives: investment adviser

South Carolina Hedge Fund Law – Investment Advisor Registration and Form D Filings

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Below we have provided two separate sources from the South Carolina Securities Division Website.  First, we have reproduced a very short blurb from their website which explains that investment advisors who have a place of business in South Carolina must generally be registered as an investment advisor.  Second, we have reproduced their schedule and instructions for the state blue sky filings which need to be made by the hedge fund manager after the first sale of securities in the state.  In general hedge fund interests are sold in accordance with a Regulation D 506 hedge fund offering.  States generally have the authority to require Form D filings when a sale under 506 is made to residents of the state.  In South Carolina the requirement is to make the Form D filing within 15 days of the first sale in South Carolina.  The hedge fund manager will also need to send in a check for $300.  Continue reading →

Georgia Hedge Fund Law – Investment Advisor Registration Exemption

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Georgia Hedge Fund Managers Generally Exempt From Registration

Below we have provided two separate sources from Georgia’s Securities Division Website.  First, we have reproduced their frequently asked questions on investment advisor registration.  Specifically it should be noted that Geogia based hedge fund managers do not generally need to register as investment advisors with the state of Georgia if they only manage one fund.  While managers are not required to be registered, they still will need to make sure that they follow all necessary compliance rules which the hedge fund lawyer can remind them of. Continue reading →

Massachusetts Hedge Fund Law – Investment Advisory Registration Renewals

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Unfortunately for hedge fund managers who are located in Massachusetts, there is generally a requirement to be registered as an investment advisor with the Massachusetts Securities Division.   One of the good things about the Massachusetts Securities Division is that they are generally knowledgeable and the division’s website posts good information for registered investment advisors.  The posts below deal with (1) Massachusetts investment advisor renewals for 2009 and (2) a discussion of the submission requirements for ADV part II through the IARD system.

While these posts are helpful, Massachusetts hedge fund managers are urged to discussion any questions with a hedge fund attorney.  Continue reading →

Exemption From Florida Investment Advisory Registration

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Most states do not have securities laws which provide hedge fund managers with an exemption from investment advisor registration at the state level.  However, Florida does have an exemption which many Florida based hedge fund managers rely upon in order to avoid registration with the Florida Securities Division.

Specifically, Section 517.021(13)(b) of the Florida laws provide that the term “investment adviser” does not include “any person who does not hold herself or himself out to the general public as an investment adviser and has no more than 15 clients within 12 consecutive months in this state.”  Of course the Florida hedge fund manager or prospective manager and the hedge fund attorney should discuss whether the manager’s investment advisory activities will fall within this definition.  Continue reading →

Florida Hedge Fund Law – Investment Advisor Registration Information

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Florida is a very popular jurisdiction for hedge fund formation.  Along with New York, Connecticut, California, and Texas, Florida ranks as one of the most popular hedge fund jurisdictions.  I have included below a description of the investment advisor provisions from the Florida Securities Division website.  One thing to note, as with all Securities Division websites, is that the information below is not the full picture.  For instance, the notice below does not mention a common provision which exempts Florida hedge fund managers from investment advisor registration with the state. Continue reading →

Colorado Hedge Fund Law – Colorado Investment Advisor Privacy Rules

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Application of the Gramm-Leach-Bliley Act to Colorado Registered Investment Advisors

A common question for state registered investment advisors is regarding their responsibilities for maintaining the privacy of their hedge fund investors.  Many state securities divisions provide notice on their website regarding the applicability of the Gramm-Leach-Bliley Act to the manager’s investment advisory activities.  The Colorado Securities Division, which has a savvy and knowledgeable staff, has provided Colorado investment advisers with an overview of their responsibilities with regard to “non-public personal information.”  In general most hedge funds do not have a need to disclose the “non-public personal information” of their investors to outside parties, but if a hedge fund manager does need to disclose such information to third parties, then the manager should discuss this in greater detail with his hedge fund attorney.

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Hedge Fund Managers and Investment Advisor Registration Status

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Many hedge fund managers who are registered as investment advisors with the SEC have experienced losses this year as well as investor redeptions.  For some managers the losses combined with investor redemptions may have the effect of decreasing an advisor’s assets below the $25million threshold for SEC investment advisor registration.  Generally an investment advisor is not allowed to be registered with the SEC if the manager’s assets under management do not exceed $25 million. Continue reading →

Hedge Funds Blindsighted by Massive Ponzi Scheme

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According to a SEC release this morning (and every other financial news agency), major hedge funds, banks and other financial institutional were caught in a Ponzi scheme of epic proportions.  While it is hard to believe that such large groups were blindsighted by this, it does showcase the fact that fraud can happen to even sophisticated investors and that hedge fund due diligence (an ongoing due diligence) is absolutely required.  The SEC release is reprinted below. Continue reading →

Wisconsin Based Hedge Funds – Wisconsin Investment Advisory Rules

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One of the key issues which hedge fund managers will need to determine early in the hedge fund formation process is whether the management company will need to be registered as an investment adviser with the state securities commission (or potentially with the SEC).  Generally the lawyer advising the management company will survey the state laws to determine whether or not registration is necessary.  While the lawyer will look directly to the state statutes through some sort of online legal database such as Lexis Nexis (to ensure that the most current and up to date information is provided to the client), the hedge fund manager can also check with his state securities commission to see if registration is required.  Sometimes states, such as Wisconsin, will include their registration information on their website.  The notice below is typical of such a practice. Continue reading →

California Investment Advisors Renewal Notice

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I received this notice today from the California Department of Corporations.  All California registered Investment Advisors should take note that IARD renewal fees are due by next Friday, December 12.  If you are registered and need help with the renewal process, please contact us.  Continue reading →