Private Investment Funds

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On March 26, the European Securities and Markets Authority (ESMA) published an updated questions and answers (Updated Q&A) of the application on the Alternative Investment Fund Managers Directive (AIFMD). The Updated Q&A includes updated and new questions and answers on reporting, notification, additional own funds and scope as discussed below.
Continue Reading ESMA Updates Q&A on the AIFMD

A recent response by the Internal Revenue Service Chief Counsel (CCA) to an inquiry from one of its field office agents addressed the question of whether management fees earned by an investment manager organized as a limited liability company (LLC) and allocated to its members—all individuals—were subject to self-employment tax. (The CCA response is not …

On May 2, the Internal Revenue Service issued a notice (Notice 2014-33) providing for a transition period for enforcing the withholding rules of the Foreign Account Tax Compliance Act (FATCA) and extending the period by which investment funds need to have FATCA procedures in place for entity investors. Pursuant to the notice:

  • Years 2014 and

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The Cayman Islands announced on March 15 that it intends to enter into a Model 1 Intergovernmental Agreement (IGA) with the Internal Revenue Service for Foreign Account Tax Compliance Act (FATCA) compliance purposes. Accordingly, hedge funds and private equity funds that operate in the Cayman Islands will not have to enter into FATCA agreements with…

On January 18, the Treasury Department issued final regulations under the Foreign Account Tax Compliance Act (FATCA). The final regulations incorporate the FATCA guidance that the Internal Revenue Service (IRS) has issued since proposed FATCA regulations were issued last February, as well as certain comments received regarding the proposed FATCA regulations.Continue Reading FATCA Regulations Are Finalized

The Internal Revenue Service this week released Announcement 2012-42 (the Announcement), which postpones until 2014 the need for foreign hedge funds and private equity funds to request Foreign Account Tax Compliance Act (FATCA) information and documentation from their investors. In effect, the IRS has delayed implementation of the FATCA tax reporting rules until 2014. The…

Form SHC is due once every five years as part of a survey conducted by the U.S. Department of the Treasury regarding ownership of foreign securities by U.S. residents. The Form solicits information identifying foreign securities owned by U.S. residents. The Form is due on March 2, 2012 for the year ending December 31, 2011.Continue Reading Treasury Form SHC and Private Fund Advisers

Co-authored by James B. Anderson.

On December 21, the Securities and Exchange Commission adopted an amendment to the accredited investor net worth standard under Regulation D of the Securities Act of 1933, as amended, to exclude the value of an individual’s primary residence from the $1 million net worth calculations used to determine whether such individual is an “accredited investor” qualified to invest in certain unregistered securities offerings. The amendment conforms the SEC’s definition of an “accredited investor” to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).Continue Reading SEC Adopts Revised Net Worth Standard for Accredited Investors