Compliance

SEC Extends Compliance Deadlines On Advisors To Private Funds

Tom Burroughes Group Editor 12 April 2011

SEC Extends Compliance Deadlines On Advisors To Private Funds

The Securities and Exchange Commission has extended compliance deadlines for advisors to private funds, such as hedge funds and private equity vehicles. The decision was welcomed by Kinetic Partners, the professional services firm.

The original compliance deadline set under the Dodd-Frank Reform Act from 21 July to the first quarter of next year. The extension has been put in place to deal with additional responsibilities and workload put on the SEC, the regulator said on its website.

“The challenges facing asset managers in ensuring compliance with the Dodd Frank Reform Act are very time-sensitive and we believe this will help avoid both unnecessary and rushed registrations for around 500 UK based asset managers (including managers of many hedge and private equity funds) currently working on their registrations,” Andrew Shrimpton, a member in regulatory compliance at Kinetic Partners.

"It will allow more time to analyse exemptions for managers hoping to be exempt from registration, based on final rules, once the Commission completes its implementing rulemaking by 21 July 2011," he said.  

Historically, many of private fund advisors had been exempt from registration under the so-called “private adviser” exemption under US legislation.

As described by the SEC website, the Dodd-Frank Act replaces this exemption with several narrower exemptions for advisors that exclusively advise venture capital funds and private fund advisors with less than $150 million in assets under management in the US.

Foreign private advisors and advisors to licensed small business investment companies also are exempted from this rule.

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