The “Bad Actor” Amendments: Private Issuer Compliance with Rule 506

Simon Riveles Bad Actor, General Solicitation, Hedge Funds, Jobs Act, Private Fund Exemption, Private Placement, Reg D Rule 506

By Simon Riveles and Peter Tyson On July 10, 2013, the Securities and Exchange Commission (SEC) adopted amendments to Rule 506 of the Securities Act of 1933 to disqualify securities offerings relying on the Rule 506 exemption that involve certain “felons and other ‘bad actors’”.  The final amendments (the Final Rules) went into effect on September 23, 2013 (the Effective Date) and apply to all …

General Solicitation May Trigger State Investment Adviser Registration in Certain States

Simon Riveles Advertising, Compliance, General Solicitation, Investment Adviser Registration, Private Fund Exemption

Background As a consequence of the Jumpstart Our Business Startups Act (“JOBS Act”), beginning September 23, 2013, managers of private funds will be permitted to advertise and solicit the general public in an effort to raise capital for their private fund. While the requirements for investment adviser registration vary from state to state, Florida, Indiana, Louisiana, Michigan, Ohio, Pennsylvania, and Tennessee provide an exemption to …

Rhode Island Adopts Private Fund Adviser Exemption to State IA Registration

Simon Riveles Hedge Funds, Private Fund Exemption, Uncategorized

Rhode Island joins a growing list of states that have adopted, or propose to adopt, rules or orders providing a state level private fund adviser exemption to investment adviser registration. These states include California, Colorado, Indiana, Maine, Massachusetts, Michigan, Virginia and Wisconsin. The Rhode Island exemption, effective May 17, 2012, provides managers to private funds, such as hedge and private equity funds, with an exemption …

Virginia Proposes New IA Registration Exemption for Private Fund Advisers

Simon Riveles Dodd-Frank, Hedge Funds, Private Equity Fund, Private Fund Exemption, SEC, Uncategorized

On February 14, 2012, the Virginia Division of Securities and Retail Franchising (the “Securities Division”) proposed the adoption of a new rule exempting certain managers to certain private funds based on the North American Securities Administrators Association (“NASAA”)  model exemption for investment advisers solely to private funds. The new rule would exempt advisers to private funds excluded from the definition of investment company under Section …

CFTC Rescinds and Modifies Certain Exemptions to Registration for CTOs and CTAs

Simon Riveles CFTC, CPO, CTA, Private Fund Exemption

On February 9, 2012, the CFTC adopted final rules regarding changes to Part 4 of the Commission’s regulations regarding registration and compliance obligations for CPOs and CTAs. The new rules: rescind registration exemptions available for commodity pool operators (“CPOs”) offering commodity pools to sophisticated and creditworthy investors under CFTC regulation 4.13(a)(4); rescind relief from the certification requirement for annual reports providing certain pools offered only …

Massachusettes Adopts New Private Fund Adviser Registration Rules

Simon Riveles Investment Adviser Registration, Private Fund Exemption

On January 12, 2012, the Massachusetts Securities Division adopted new rules for the registration of investment advisers solely to 3(c)(7), venture capital or 3(c)(1) funds, where all investors in the 3(c)(1) fund are “qualified clients”. The rules replace the existing exemption which allowed advisers to “institutional buyers” including private funds, such as hedge funds, in which each investor is accredited and has invested at least …