On February 9, 2022, the Securities and Exchange Commission (SEC) issued a new proposed rule that would overhaul the cybersecurity regulations for registered investment advisers, registered investment companies, and funds. This post focuses on the provisions that impact private fund advisers. These proposed rules must still go through public review and comment. The comment period will be open for 30 days after the publication of the rules in the Federal Register or April 11, 2022 (60 days after issuance), whichever is later. It will likely take at least 3 months for the SEC to produce any fin ..read more

On February 9, 2022, the Securities and Exchange Commission (SEC) proposed a significant expansion to the regulations covering private funds advisers. The new proposed rules are the most significant changes to the regulation of private fund advisers since the SEC’s rules requiring them to register became effective in 2012. These proposed rules must still go through public review and comment. The comment period will be open for 30 days after the publication of the rules in the Federal Register or April 11, 2022 (60 days after issuance), whichever is later. It will likely take at least 3 months ..read more

A Private Placement Memorandum, or “PPM,” is a disclosure document often used in connection with a private offering of securities. It contains a compilation of information about the company issuing the securities, the terms of the securities, and the risks of investing in those securities. This article explains the legal background underlying why a PPM is commonly used and overviews what is typically included in a PPM. Why Use a PPM? Put simply, a PPM is used to inform potential investors about an offering of securities. The amount of disclosures included in a disclosure document like a PP ..read more

On August 26, 2020, the Securities and Exchange Commission (“SEC”) issued a press release indicating that it had adopted amendments to the definition of “accredited investor.” The amendments, among other things, added to the list of individuals who qualify as accredited investors, holders in good standing of a Series 7, Series 65, or Series 82 license. The amendments also updated the definition of accredited investor to include, with respect to investments in private funds, natural persons who are “knowledgeable employees” as defined in Rule 3c(5)(a)(4) of the Investment Company Act of 1940 ..read more

New investment advisers are typically focused on creating marketable investment programs and raising capital. Legal matters are often delegated to outside counsel and the adviser’s investment in operations, staffing and compliance is often kept at a minimum to start. While this strategy may make sense on a budgetary level, new advisers need to devote some attention to inevitable operational issues in order to minimize their cost and disruption. At the top of this list is the issue of trade errors. Trade Errors Are Not Rare Most new advisers assume that trade errors will not occur. While such ..read more