CFTC Rescinds and Amends Common Registration Exemptions

March 6, 2012 Comments Off on CFTC Rescinds and Amends Common Registration Exemptions

The Commodities Futures Trading Commission (CFTC) recently issued final rules that rescind one common exemption from registration as a commodity pool operator (CPO) and that modify the reporting requirements for others. Funds relying on the existing exemptions will need to qualify for alternative exemptions or determine whether CPO registration will be required.

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SEC Tightens Rules on Advisory Performance Fee Charges

February 16, 2012 § 2 Comments

As part of its continuing Dodd-Frank mandated rulemaking, the Securities and Exchange Commission recently issued final rules to raise the net worth requirement for investors who pay performance fees. The tightened standard excludes the value of the investor’s home from the net worth calculation.

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SEC Finalizes Changes to Accredited Investor Standard

February 12, 2012 § 5 Comments

The Securities and Exchange Commission recently adopted final rules to implement changes to the accredited investor standard required by the Dodd-Frank Act.

Most hedge funds rely on Rule 506 of Regulation D when offering their interests to investors. Rule 506 generally exempts funds from having to register their private securities offerings with the SEC when they sell their interests only to accredited investors. Under the pre-Dodd-Frank standard, individuals were considered accredited investors if they had either a $1,000,000 net worth or satisfied an alternative annual income test.

Upon passage, Dodd-Frank immediately required that the value of an individual’s primary residence be excluded when calculating net worth. The Act instructed the SEC to amend its rules to reflect this exclusion. The SEC’s recent action did that and clarified other elements of the standard.  « Read the rest of this entry »

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