Joseph Iskowitz

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Co-authored by Avi Badash.

The Securities and Exchange Commission has extended the sunset date of Rule 206(3)-3T under the Investment Advisers Act of 1940 (the Act) from December 31, 2012, to December 31, 2014. Rule 206(3)-3T is a temporary rule that provides certain investment advisers with alternative means to meet the requirements of Section 206(3) of the Act regarding acting in a principal capacity in transactions with certain advisory clients. The SEC adopted this extension because it believes that the issues raised by principal trading should be considered as part of a broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act.Continue Reading SEC Extends Sunset Date for Temporary Rule Regarding Principal Trades with Certain Advisory Clients

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

On October 26, the Securities and Exchange Commission adopted Form PF, which it jointly designed with the Commodity Futures Trading Commission to collect systemic risk data about hedge funds and other private funds. The CFTC is expected to vote on adopting the form within the next week. While Form PF is not yet available, SEC Chairman Mary Schapiro indicated that the new form reflects changes to the original proposal. These changes include:Continue Reading SEC Adopts Form PF

On July 26, the Securities and Exchange Commission adopted Rule 13h-1 under Section 13(h) of the Securities Exchange Act of 1934. The rule is intended to help the SEC identify market participants engaged in substantial trading, obtain information needed to monitor the impact of those trades, and analyze such market participants’ trading activity.Continue Reading SEC Adopts Large Trader Reporting Regime

On July 12, the Securities and Exchange Commission issued an order raising the thresholds for determining who is a “qualified client” for purposes of Rule 205-3 under the Investment Advisers Act of 1940. Rule 205-3 exempts an investment adviser from the prohibition against charging a client performance fees in certain circumstances, including when the client is a qualified client. Under the order, a qualified client is one who: (1) has at least $1 million under the management of the adviser immediately after entering into the advisory contract, or (2) the adviser reasonably believes has a net worth of more than $2 million at the time the contract is entered into. These thresholds were raised from $750,000 and $1,500,000, respectively, to adjust for inflation, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC’s order becomes effective on September 19.
Continue Reading SEC Raises “Qualified Client” Thresholds

Co-authored by Maxwell Li

On July 11, the U.S. Government Accountability Office (GAO) released a report on the feasibility of forming a self-regulatory organization (SRO) to provide primary oversight of private fund advisers. The report was part of a mandate by the Dodd-Frank Wall Street Reform and Consumer Protection Act to address the potential gap…

The U.S. Department of the Treasury has published a revised version of, and has delayed the first required filing of, the monthly report to the Federal Reserve Bank relating to the aggregate holdings of long-term securities by U.S. and foreign residents (Form SLT). Investment advisers and/or private investment funds that exceed the $1 billion threshold described below must file their first Form SLT report no later than October 23.Continue Reading Form SLT Revised and First Form SLT Filing Date Delayed

As required by Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission has announced that it is proposing a rule applicable to broker-dealers and investment advisers with $1 billion or more in assets that would (1) require them to file annual reports with the SEC related to…

On January 27, as required by Section 919B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission released a study conducted by the staff of the Office of Investor Education and Advocacy recommending steps to improve investor access to information about investment advisers and broker-dealers. The staff recommends in …