Venture Capital Funds May Not Have to Register with Hedge Funds While hedge funds have reluctantly resigned to the likely fate of SEC registration (see MFA Supports Registration), the venture capital community has been fighting hard to remain unregistered.  On this front, the VC community enjoyed a victory last week [...]

Over the past few months I have written extensively about the new regulatory environment and the likelihood that many hedge fund managers will need to register with the SEC within the next year or so (assuming that Congress passes one of many proposed registration bills).  Anticipating this requirement, my team [...]

Section 13(d) of the Securities Act of 1934 requires any person who beneficially owns 5% or more of a class of equity securities of a publicly traded company to file a report with the SEC within 10 days of reaching the 5% ownership threshold.  SEC Rule 13d-1 provides more detailed [...]

Review of State Investment Advisory Fee Rules One of the things I have tried to emphasize within this blog is that there is no “one size fits all” legal solution to hedge fund formation.  Each client/manager has a unique set of circumstances and will be subject to a potentially different [...]

California Based Hedge Fund Managers Receive Answers to Common Questions As I have discussed many times before, each state securities division has different rules and regulations.  In addition, each state has different interpretations of those rules and regulations. This makes it difficult for hedge fund managers to really know exactly [...]

FINRA to Announce New Investment Banking Examination For many years now all brokers have been treated equally with regard to examination requirements. Whether a broker was working solely with retail clients or solely with institutions on a private placement basis, each such broker would need to take and pass the [...]

Access to Records under the Delaware Uniform Limited Partnership Act A vast majority of hedge funds are structured as limited partnerships under the Delaware Uniform Limited Partnership Act (the DULPA).  The code is very flexible and allows the limited partnership agreement (LPA) to be drafted in a very manager-friendly manner. [...]

Most hedge funds will require investors to be “accredited investors.”  In general, a natural person is deemed to be an accredited investor if (1) the natural person has an individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase [...]

There are occasionally times when questions arise as to the meaning of certain undefined terms within statutes or regulations.  Practitioners have a variety of different resources which can help shed light onto these undefined terms or at least provide background information or context.  Below is the SEC’s Interpretive Release on [...]

Starting a hedge fund in the District of Columbia In DC, things are starting to get back to normal post-election.  Hedge fund and investment managers who are located in DC, however, will generally need to be registered as investment advisors with the Department of Insurance, Securities and Banking (ISB).  I’ve [...]