Source: https://www.investmentfundlawblog.com/2012-annual-compliance-obligations-what-you-need-to-know/
Timestamp: 2019-08-23 04:52:24
Document Index: 649263602

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In light of the current regulatory environment, now more than ever, it is critical for you to comply with all of the legal requirements and best practices applicable to Investment Advisers. The beginning of the year is a good time to review, consider and, if applicable, satisfy these requirements and best practices.
As the new year is upon us, there are some important annual compliance obligations Investment Advisers either registered with the Securities and Exchange Commission (the “SEC”) or with a particular state (“Investment Adviser”) should be aware.
First, we wanted to address three situations where Investment Advisers may need to make changes with regard to their registration. These are:
“Hot” Compliance Areas
Qualified Client Threshold Updated. In a Final Rule amendment recently released, the SEC clarified the calculation of the dollar amount thresholds applicable to the new qualified client standard which became effective on September 19, 2011. The changes that became effective September 19, 2011 for the “qualified client” definition under the Advisers Act involved changing the previous $750,000 AUM test to $1 million and the current net worth test to $2 million. The value of a person’s primary residence and certain debt secured by the property may not be included in the net worth test. Either of these tests must be met at the time of entering into the advisory contract. Investment Advisers that impose performance fees should prepare to amend form advisory agreements to account for the new thresholds for contracts entered into after September 19, 2011. Investment Advisers that manage hedge funds, private equity funds, or other private funds that impose performance fees or incentive/carried interest allocations should have revised subscription agreements as follow:
Update Form ADV. An Investment Adviser must file an annual amendment to Form ADV Part 1 and Form ADV Part 2 within 90 days of the end of its fiscal year. Part 1 and Part 2A of the Form ADV must be filed with the SEC through the electronic IARD system. Accordingly, if you are SEC-registered adviser whose fiscal year ends on or after December 31, 2011, you must file Part 1A and Part 2A Brochure as part of your annual updating amendment by March 30, 2012. If you are a state-registered adviser whose fiscal year ends on or after December 31, 2011, you must also file Part 1A, Part 1B, Part 2A Brochure and 2B Brochure Supplement as part of your annual updating amendment by March 30, 2012.
Tagged: Compliance, Dodd Frank Wall Street Reform And Consumer Protection Act, Form ADV, Hedge Funds, Investment Advisers, Pay To Play, Private Funds, Rules Regulations and SEC
Updated: October 27, 2016 10:10 am