Opalesque Industry Update - Almost two years since the near collapse of the global financial markets, President Barack Obama has signed into law the most sweeping regulatory reform legislation since the great depression – the Dodd-Frank Wall Street Reform and Consumer Protection Act. The most significant effect on investment advisers, who have business in the US or (in certain cases) have even tangential relationships with US investors, is the requirement to register with the US Securities and Exchange Commission (SEC). |
“The expanded authority of the SEC will have a far reaching effect on the alternative investment industry, both in the US and abroad. Not only will most investment advisers now be required to register, they will also be faced with more onerous reporting obligations. Therefore, advisers need to consider how they will respond to the heightened scrutiny and the SEC’s new demands,” says Neil Morris, a Member of Kinetic Partners.
Kinetic Partners has provided a relevant summary of some of the most important aspects affecting hedge fund and private equity advisers, as well as identifying the key requirements on which advisers must focus when becoming registered.
Registration thresholds – who needs to register?
Foreign private adviser exemption
Other exemptions include venture capital fund advisers, registered commodity trading advisers and family offices (all of which fall within particular specifications).
Key requirements for SEC Registered Investment Advisers and compliance with the Investment Advisers Act of 1940 (as amended) include:
Although certain details, such as disclosure and reporting requirements, still need to be clarified through implementation by the SEC, it is pertinent that advisers evaluate their firm and prepare for more rigorous SEC oversight. Kinetic Partners can assist advisers in complying with the new registration requirements as well as creating and implementing an efficient compliance infrastructure.