Andrew Shrimpton, member at Kinetic Partners, on the extension of the deadline for SEC registration for Foreign Private Investors…
The SEC have now confirmed the extension of the deadline for registration for hedge funds to 30 March 2012, following the Dodd Frank Wall Street Reform Act which was passed in July last year.
The extension hugely relieves the pressure on fund managers, as it provides them with much needed time to implement additional systems to ensure timely compliance with the provisions of the Act. However, there is still a lot of work for fund managers to do in order to meet the deadline.
From a UK perspective, the threshold for Foreign Private investors at USD25m is still lower than the threshold for US mangers, who must manage less than USD150m of US assets to avoid SEC registration. Therefore, a large majority of UK fund managers with US assets must, by March 2012, have submitted the "Amended adviser" forms to the SEC that require disclosure of five categories of gatekeepers.
Although the compliance and monitoring obligations will be onerous for UK managers, the SEC’s aim is to create red flags for supervisors so that they will not again miss discrepancies, such as occurred with the one-man-band Auditor used for the Madoff scheme.
