Q&A For New FINRA Exam License We have fielded a number of questions regarding the new Series 79 exam for investment banking professionals.  We are creating this question and answer page as a service to our readers.  We will attempt to answer questions as best as possible and our understanding [...]

Recently I have received a few good hedge fund law questions.  Please remember that these answers are general discussions of the law and should not be a substitute for actual legal advice.  This discussion does not form an attorney-client relationship, please see our disclaimer. **** Question: [with reference to the [...]

What does it mean for a hedge fund to have an affiliated broker-dealer? Definition of Broker-Dealer We will start off by defining a broker-dealer.  Basically a broker-dealer is the term used in the investment management industry for a firm which executes securities trades.  The trades may be executed by these [...]

Questions and discussions from Hedge Fund Law Blog readers I get quite a few questions from readers and usually I am able to answer these questions via email within a couple of days.  If you have any questions, comments or simply want more information on starting a hedge fund, please [...]

A common question for hedge fund managers which are registered as commodity pool operators is whether they also need to be registered as commodity trading advisors (CTA) with the NFA.  The answer is generally no. There is no need for a commodity-based hedge fund manager (i.e., CPO) to register as [...]

I have seen many hedge fund managers and, like the investment strategies they pursue, each one is different.  This article will attempt to discuss hedge fund managers in general, if you have any specific questions, please feel free to contact us. Who are hedge fund managers? In general hedge fund [...]

The hedge fund performance fee (also known as the “performance allocation,” the “incentive allocation,” the “incentive fee,” among other aliases), is a periodic fee which is calculated as a percentage of any gains of a hedge fund over a predetermined period of time. The fee is normally taken on both [...]

A hedge fund administrator is a service provider to the hedge fund; the main job of the administrator is to provide certain accounting and back office services to a hedge fund as detailed below. Hedge fund administrator services Generally, administrators will provide a variety of services to the hedge fund [...]

Individual retirement account (IRA) investments into hedge funds are increasing rapidly.  Below are some common questions hedge fund managers have about potential investments by IRAs. Can an IRA invest in a hedge fund? Generally yes, however the IRA and the hedge fund must make sure to follow certain regulations which [...]

Hedge fund investors are always cognizant of the potential tax consequences of an investment into a hedge fund.  One of the issues which a hedge fund manager should be aware of is the concept of unrelated business taxable income or UBTI. What is UBTI and why is it important? As [...]