On October 7, 2014, The Hedge Fund Association (“HFA”), an international not-for-profit organization representing the interests of investors, hedge funds and service providers, has submitted a comment letter, which can be found at HFA-SEC-Comment-Letter, to the U.S. Securities and Exchange Commission’s (SEC) as the regulatory agency considers proposed changes to the definition of an “accredited investor” under Rule 501 of Regulation D. On behalf of the …
CFTC Issues Guidance to Exempt CPOs Seeking to Generally Solicit
By Matt McCullough and Eugene Schlesinger On September 9, the Commodity Futures Trading Commission (CFTC) issued CFTC Letter No. 14-116 in response to requests that it harmonize its regulations with Rule 506(c)’s general solicitation provision. Rule 506(c) lifted the prohibition on issuers, including hedge fund managers, from engaging in “general solicitation.” General solicitation includes advertisements in periodicals, on television, radio or public websites, and seminars …
SEC Considers Change to Accredited Investor Standard
Under the Dodd-Frank Act of 2010, the Securities and Exchange Commission (the “SEC”) is required to examine the definition of “accredited investor” every four years to determine if it should be modified. Under the current standard, a natural person qualifies as an “accredited investor” for purposes of participating in a Rule 506 offering if he or she has earned at least $200,000 in annual income in each …
SEC issues Investor Alert: 10 Red Flags that a Private Placement May be Fraudulent or a Scam
August 2014 Earlier this month, the Securities & Exchange Commission’s (the “SEC” or “Commission”) Office of Investor Education and Advocacy released a list of ten red flags investor’s should be wary of when evaluating a private offering. Under the securities law, sales of securities in a fund, a company or other issuer that have not been registered with the SEC are not subject to the …
Simon Riveles Appointed Chairman of the Hedge Fund Association’s Regulatory & Government Advisory Board
August 26. 2014 The Hedge Fund Association (“HFA”), a global nonprofit trade and nonpartisan lobbying organization, announced today the appointment of Simon Riveles of Riveles Law Group, as Chairman of its Regulatory & Government Advisory Board. The Board educates lawmakers and regulators about hedge funds, and advocates on behalf of its members and their interests. More information on the HFA can be found here: https://www.thehfa.org/ …
SEC Issues New Guidelines on Social Media Use
By Masha Goncharova and Simon Riveles In response to growing interest among investment advisers to communicate to clients through social media, the SEC staff has been establishing new informal guidelines on proper social media use. New parameters set forth this spring limit the scope of client testimonials and now allow advisers to provide required cautionary legends via hyperlinks, making it easier to communicate on platforms …
Simon Riveles Panelist at the Infovest21 Seminar Entitled “Regulatory Update for Hedge Funds and Funds of Funds”
On June 3, 2014, Infovest21, an information provider to hedge fund investors, managers, funds of funds, and service providers, sponsored a seminar at the Cornell Club in New York entitled “Regulatory Update for Hedge Funds and Funds of Funds.” The seminar featured an expert panel comprised of Simon Riveles of Riveles Law Group, Jillian Timmermans of compliance consulting firm, Cordium, and Gene DaCosta of …
SEC Launches New Group Focused on Private Equity & Hedge Funds
By Simon Riveles and Simon Cooke According to a report by Reuters, the U.S. Securities and Exchange Commission (“SEC”) has formed a group dedicated to examine private equity funds and hedge funds (the “Group”). The Group will focus on how these funds value their assets, disclose their fees and communicate with investors. The Group is co-chaired by Igor Rozenblit and Marc Wyatt. Mr. Rozenblit, both …
Private Funds, the Cayman Islands IGA and FACTA
By Simon Riveles and Simon M. Cooke. On November 29, 2013, the Cayman Islands signed a FACTA Model 1 intergovernmental agreement (“IGA”) with the United States. The IGA ensures that financial institutions located in the Caymans, whose investors include ‘Specified U.S. Persons’ (defined below), will be able to largely bypass the burdensome FACTA compliance obligations that are applicable to financial institutions located in Model 2 …
SEC issues No-Action Letter providing M&A Brokers with relief from broker-dealer registration
By Simon Riveles and Simon M. Cooke On January 31, 2014, the SEC’s Division of Trading and Markets (the “SEC”) issued a No-Action Letter allowing an M&A Broker (defined below), to effect securities’ transactions in connection with the transfer of ownership of a privately held company (also defined below), subject to certain conditions, without registering as a broker-dealer pursuant to Section 15(b) of the Securities …
SEC Moves to Update Regulation A
By Kathryn Dachille and Simon Riveles December 18, 2013, the SEC voted to propose amendments to Regulation A that would allow offerings of up to $50 million in any twelve month period (“Tier 2 offerings”), as mandated by Title IV of the JOBS Act (so called Regulation A+”). While Tier 2 offerings would be subject to significant additional requirements, such as the provision of audited …
SEC Issues New Guidance on Bad Actor Rules
By Simon Riveles and Simon Cooke On July 10, 2013, the U.S. 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 “bad actors”. These amendments came into effect on September 23, 2013. Please refer to our earlier blog for background on these amendments. On December …