Recognized as one of the most active and highly regarded investment management practices in the United States, our group represents all types of asset managers across the liquidity spectrum, including private equity funds, credit funds, hedge funds, venture capital funds, real estate funds, hybrid funds and family offices. We have successfully raised hundreds of billions of dollars for our clients, who benefit from our extensive market knowledge, industry-leading networking events and strong relationships with all major market participants.
Private Funds Regulatory Update
Practices
People
June 12, 2012
SEC Publishes FAQs on Form PF
On June 8, 2012, the SEC published responses to frequently asked questions relating to Form PF. The responses address questions relating to hedge funds, liquidity funds, private equity funds, aggregation of assets and fund of funds. The FAQs clarify, among other things, that a private fund that does not meet the definition of a hedge fund (defined generally to be any private fund that has the ability to pay a performance fee to its adviser, borrow in excess of a certain amount, or sell assets short) upon an initial filing, but later does meet the definition (because, for example, its fund documents change to include the ability to engage in short selling), must change how it is categorized for reporting purposes. As a result, the categorization of a private fund as a hedge fund may change from reporting period to reporting period, which in turn may affect whether an adviser is a large hedge fund adviser with respect to a particular reporting period. The FAQs also reiterate that a private fund that would be categorized as a private equity fund, except for the fact that the fund documents allow the fund to either employ large amounts of leverage or sell assets short, should be categorized as a hedge fund for reporting purposes, notwithstanding that the fund does not in fact, nor does it intend to, incur leverage or short any assets.
A copy of the FAQs is available by clicking here.
SEC Extends Date for Investment Advisers to Comply with Ban on Third-Party Solicitation
On June 8, 2012, the SEC issued a final rule extending the date by which investment advisers must comply with the ban on third-party solicitation set forth in Rule 206(4)-5(a)(2) under the Investment Advisers Act, the "pay to play" rule. The SEC extended the compliance date from June 13, 2012 until nine months after the compliance date of a final rule adopted by the SEC by which municipal advisor firms must register under the Securities Exchange Act of 1934. Once such final rule is adopted, the SEC will issue the new compliance date for the ban on third-party solicitation in a notice in the Federal Register.
A copy of the SEC's extension is available by clicking here.
SEC Approves Amendments to FINRA Rule 5123: Private Placements of Securities
On June 7, 2012, the SEC approved amendments to FINRA Rule 5123 on an accelerated basis. The rule requires FINRA member firms that participate in (or whose associated persons participate in) certain private placements to make notice filings (which must include a copy of the offering document used in the private placement, if any) with FINRA, subject to certain exceptions.
A copy of the SEC's approval notice is available by clicking here.