Hedge fund managers based outside the US with over $25 million in assets from US investors may need to register with the Securities and Exchange Commission (SEC) under new financial legislation.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, will apply to non-US fund managers with over 15 US investors and/or more than $25 million of assets from investors based in the US. Funds caught by the legislation will need to develop a compliance manual, a code of ethics and a compliance monitoring programme that meets SEC requirements.
Funds will also be expected to undertake an annual review and testing of the compliance programme as well as participate in yearly compliance training.
Karen Anderberg, partner at law firm Dechert in London, said numerous hedge fund managers will be caught by the requirements. She said many fund managers were concerned by the legislation.
âIt is going to be costly with the additional regulation. Fund managers are going to have to have a chief compliance officer with knowledge of SEC requirements,â said Anderberg.
Steve Whittaker, a partner at law firm Simmons & Simmons, said the regulations did not appear to be particularly onerous for hedge funds and said many fund managers did not seem too concerned. âItâs not as difficult as the UKâs FSA regulation,â he added.
Whittaker said most fund managers will register, especially if they are dealing with major investors in the US.
The Alternative Investment Management Association (Aima), the global hedge fund industry association, also expressed concerns at the new requirements.
âIf non-US hedge fund managers are subject to supervisory standards outlined by the G20 and the US, including similar reporting requirements and agreed information-sharing arrangements, then there should be an exemption from additional US registration for non-US hedge fund managers,â said Aim chairman Todd Groome.
Groome added that multiple registrations where a manager would have to report to two or more supervisors would create âunnecessary administrative costs.â This, he said, would act as a barrier to entry deterring smaller managers and ultimately limiting investor choice.
The SECâs new task of registering and supervising non-US fund managers caught by the new rules would be a serious challenge, warned Groome.
âThis would place a massive burden on the SECâs workload and challenge their existing supervisory capacity, and thus would not be supportive of the broader financial stability objectives,â said Groome.
http://www.hedgefundsreview.com/hed...uire-us-asset-mangers-register-dodd-frank-act
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, will apply to non-US fund managers with over 15 US investors and/or more than $25 million of assets from investors based in the US. Funds caught by the legislation will need to develop a compliance manual, a code of ethics and a compliance monitoring programme that meets SEC requirements.
Funds will also be expected to undertake an annual review and testing of the compliance programme as well as participate in yearly compliance training.
Karen Anderberg, partner at law firm Dechert in London, said numerous hedge fund managers will be caught by the requirements. She said many fund managers were concerned by the legislation.
âIt is going to be costly with the additional regulation. Fund managers are going to have to have a chief compliance officer with knowledge of SEC requirements,â said Anderberg.
Steve Whittaker, a partner at law firm Simmons & Simmons, said the regulations did not appear to be particularly onerous for hedge funds and said many fund managers did not seem too concerned. âItâs not as difficult as the UKâs FSA regulation,â he added.
Whittaker said most fund managers will register, especially if they are dealing with major investors in the US.
The Alternative Investment Management Association (Aima), the global hedge fund industry association, also expressed concerns at the new requirements.
âIf non-US hedge fund managers are subject to supervisory standards outlined by the G20 and the US, including similar reporting requirements and agreed information-sharing arrangements, then there should be an exemption from additional US registration for non-US hedge fund managers,â said Aim chairman Todd Groome.
Groome added that multiple registrations where a manager would have to report to two or more supervisors would create âunnecessary administrative costs.â This, he said, would act as a barrier to entry deterring smaller managers and ultimately limiting investor choice.
The SECâs new task of registering and supervising non-US fund managers caught by the new rules would be a serious challenge, warned Groome.
âThis would place a massive burden on the SECâs workload and challenge their existing supervisory capacity, and thus would not be supportive of the broader financial stability objectives,â said Groome.
http://www.hedgefundsreview.com/hed...uire-us-asset-mangers-register-dodd-frank-act
