Financial Reform Act: Impact on Hedge Funds, Private Equity

Financial Reform Bill: Snapshot of Impact on Hedge Funds, Private Equity
July 2010
This presentation is for general information purposes only and does not constitute Eze Castle Integration legal or investment advice as to any particular set of facts.

Situation Snapshot
July 16, 2010: Senate approves Conference Report to Dodd-Frank Wall Street Reform and Consumer Protection Act
Hedge fund and private equity regulation and registration coming
President Obama to sign into law
Expected week of July 19, 2010
Download the Conference Report

What’s included in the Reform Bill…
Registration: Hedge funds and private equity firms with >$150 million in AUM must register with the SEC
Less than $150 million? You’re exempt.
Greater State Supervision: Threshold for federal regulation of investment advisers is being raised from $30 million to $100 million
Allowing for greater state supervision of advisers
“Private Adviser” exemption in Investment Advisers Act of 1940 eliminated, “thus registering advisers to private funds with the SEC.”

Accredited Investor redefined:
$1 million net worth, excluding value of primary residence
Charging performance fee? Investor generally needs $1.5 million net worth with primary residence included
Increased Reporting: SEC has power to require advisers give info on trades and portfolios as necessary to assess systemic risk
SEC can require advisers to disclose identity or investments of their clients for purposes of systemic risk
SEC will report annually to Congress on uses of data to protect investors and market integrity

Whistle-blowing:An incentive – up to 30% of funds recovered for information provided – has been put in place to encourage whistle-blowing.
Timeline: Advisers must comply with the new provisions within one year of enactment of the conference report

How to Prepare? Technology Aspects
Data Protection
President’s Working Group say’s hedge funds should have Business Continuity and Disaster Recovery plans
Solutions: Eze Disaster Recovery & Eze Business Continuity Planning
Data Archiving
SEC advises firms retain all internal and external email and IM communications
Solution: Eze Archiving

Eze Castle Integration Overview

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Financial Reform Act: Impact on Hedge Funds, Private Equity

by Eze Castle Integration on Jul 19, 2010

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