The Securities and Exchange Commission’s Asset Management Unit has been investigating whether hedge fund managers have overvalued assets in “side pockets” and then charged investors higher fees based on those inflated values. A side pocket is a type of account that hedge funds use to separate certain illiquid investments from…
Under Secretary for International Affairs Lael Brainard recently delivered a speech at the Institute of International Bankers’ “Regulatory Dialogue with Government Officials” urging other nations to adopt the U.S. approach to hedge fund regulation: It is also vital to have common agreement on the regulation of hedge funds, and to…
Hedge fund and private equity fund managers that use registered broker-dealers to raise capital on behalf of their funds should be aware of a recent report from the North American Securities Administrators Association (“NASAA”). The 2010 Broker-Dealer Coordinated Examination Report identifies the most prevalent compliance deficiencies by broker-dealers and offers a…
The Securities and Exchange Commission has proposed a new rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act to define the term “family offices.” Advisers falling within this definition will be excluded from the definition of “investment adviser” under the Investment Advisers Act of 1940 and will therefore…
Written by Michael Wu and Judy Deng Since 2007 there have been a number of circulars (i.e., ordinances issued by industrial regulators) and regulations pertaining to whether Chinese insurance companies are permitted to invest their assets in offshore (i.e., outside of China) private equity. The following summarizes the relevant laws…
Written by Michael Wu and Judy Deng A Chinese foreign-invested fund management company (“FIE FMC”) is a fund management company formed in China with at least one non-Chinese owner. FIE FMCs are generally formed to manage foreign-invested PE/VC funds located in China (“Foreign-Invested RMB Fund”), such as Foreign-Invested Venture Capital…
On September 30, 2010, California Governor Arnold Schwarzenegger signed into law AB 1743, which regulates the activities of placement agents who solicit investments from public pensions on behalf of investment managers. The new law: prohibits a person from acting as a placement agent in connection with any potential investment by…
On September 22, 2010, the Managed Funds Association submitted initial comments to the Securities and Exchange Commission and the Commodity Futures Trading Commission on regulatory topics under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The MFA’s comments reflected concerns that the broad wording of the Dodd-Frank Act would result in…
The Securities and Exchange Commission has published its schedule for adopting rules to implement the Dodd-Frank Act. The proposed timetable for adopting rules related to the oversight of investment advisers and exempt offerings is as follows: October – December 2010 §§404 and 406: Propose (jointly with the CFTC for dual-registered investment…
Written by Michael Wu and Judy Deng Most of the “RMB fund” structures currently being used to enable non-Chinese investors to participate in private equity and venture capital investments in China are tax driven. However, some fund managers are using a RMB fund structure that is not designed to address a particular…