The regulatory focus on hedge funds continued during the first quarter of 2012, as new iniatives continued to roll out, and milestones in the implementation of rules put on the books last year were hit. For “large” hedge funds, we see the summer deadline for filing the Form PF looming large. Required by the Dodd-Frank Act, the [...]
The Securities and Exchange Commission, in conjunction with the Commodity Futures Trading Commission, has proposed a new “Form PF” reporting requirement, which, if implemented as proposed, represents a substantial increase in the amount of information required to be reported in to these regulators by hedge funds. Form PF is a statutory mandate stemming from the [...]
On the heels on several high profile scandals, the SEC has moved quickly to address “pay-to’play” practices in the hedge fund and investment advisory arenas. Last week, the SEC adopted new Rule 206(4)-5 limiting “pay-to-play” practices for investment advisers, including hedge fund investment advisers. The new Rule effectively prohibits the adviser from receiving compensation from [...]
The allocation of trades has always been an area of concern to hedge funds. The issue is whether a manager is breaching its fiduciary duties by favoring one fund or account over another. The reason this issue is so problematic is that it is so hard to define. For example, consider these scenarios: *If a manager’s funds have different investment [...]
In an effort to beef up surveillance of financial firms that hold custody of client assets, the SEC passed a final rule at the end of 2009 which amended the existing Custody Rule (Rule 206(4)-2 under the Investment Advisers Act of 1940). When the amendment was put out for public comment, the additional rules were [...]
We’re not sure what inning it is, but the hits are coming in fast and furious when it comes to bill proposals for hedge fund registration. Just today, Chris Dodd released the discussion draft of the “Restoring American Financial Stability Act of 2009’’, which contains within it the ‘‘Private Fund Investment Advisers Registration Act of [...]
With the arrest of 13 additional individuals and entities in the Galleon case, we urgently see the need for hedge fund compliance to beef up in two areas: OPERATIONAL RISK CONTOLS- Hedge Funds need to understand and monitor where and how the information being traded on is generated. TRAINING – Employees need to understand [...]
There have been two important recent developments that hedge fund compliance professionals need to be aware of related to required SEC regulatory filings. And with these changes, a bit more of the direction that regulators will be taking with hedge funds is becoming apparent. The first development is a bit surprising in that there has actually [...]
The Administration has now formally sent proposed legislation to Congress that requires registration of all investment advisers to hedge funds and other private pools of capital over $30m in the form of the proposed Private Funds Investment Adviser Registration Act of 2009. In addition to registration of the investment advisers, the Act calls for periodic reporting by these [...]
At a recent industry conference, the 2009 priorities of the SEC’s Office of Compliance Inspections (OCIE) were detailed by chief counsel John Walsh. Hedge funds need to pay particular attention to this list, as there are many items on it that directly relate to typical hedge fund activities. Here are some highlights: 1. Custody and Control [...]
