Webinar Replay: The New Form ADV Part 2

Posted on September 30, 2010 by HedgeOp

The SEC recently published the adopting release containing the changes to the new Form ADV Part 2. The Form ADV is the brochure that all SEC registered advisers are required to complete and update. The format of the new ADV Part 2, which will be publicly available, has changed from the old “check the box” format, to a new, more “narrative” plain English approach.

On September 30, 2010, HedgeOp Compliance CEO Bill Mulligan lead a webinar focusing on the following questions: (i) what are the key changes between the old and new forms?; (ii) what is the format of the new form and what content does it include?; (iii) when does the new ADV Part 2 need to filed with the SEC?

You can watch the seminar and download the presentation materials below.

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Download Presentation Materials

Download the new ADV Part 2 form and instructions

Joint Statement by CFTC Chairman Gary Gensler and European Commissioner Michel Barnier on the Financial Reform Agenda

Posted on September 29, 2010 by Jeff

Washington, DC –United States Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and European Commissioner Michel Barnier spoke today and reaffirmed their strong determination to cooperate closely in strengthening the global financial system. Specifically, Chairman Gensler and Commissioner Barnier discussed regulatory reform of the over-the-counter (OTC) derivatives markets with respect to Dodd-Frank Wall Street Reform and Consumer Protection Act and the September 2010 European proposal for a Regulation on OTC derivatives, central counterparties and trade repositories. Continue reading →

Hedge Fund Charged with Multiple Violations of Rule 105 of Regulation M; Insufficient Policies and Procedures; $2.6 Million Settlement

Posted on September 24, 2010 by Sam

The SEC has fired a warning shot to hedge funds and other market participants that it will target Rule 105 violations in its enforcement efforts and that hedge funds are expected to have robust policies and procedures for preventing and detecting Rule 105 violations. On Thursday, the SEC charged Dallas-based hedge fund manager Carlson Capital, L.P. with four violations of Rule 105 of Regulation M. The regulation prohibits purchases of an equity security made available through a public offering from an underwriter or broker or dealer participating in the offering after having sold short the same security during a restricted period (which is generally five business days before the pricing of the offering). Rule 105 is designed to prevent market participants from selling short a security just before a company prices a public offering, thereby artificially depressing the market price of the security and allowing the short seller to purchase the security at a lower price. Rule 105 applies irrespective of a trader’s intent. Carlson agreed to settle the charges for more than $2.6 million dollars and was also censured and ordered to cease and desist from further violations. Continue reading →

Insider Trading Case Against Mark Cuban Gets New Life; Implications for Hedge Funds

Posted on September 22, 2010 by Sam

In a case that should be watched closely by hedge fund managers, a federal appellate court has revived the SEC’s insider trading case against billionaire Dallas Mavericks owner Mark Cuban. The appellate court found that there was “more than a plausible” basis to find in the SEC’s favor. The case will now go back to the lower court for further litigation or settlement discussions.

Continue reading →

Uncertain Future for New Dodd-Frank FOIA Confidentiality Provision Applicable to Hedge Fund Managers

Posted on September 20, 2010 by Sam

As the SEC increases the frequency and intensity of its periodic examinations of hedge fund managers, many will wonder whether materials produced to the SEC during the course of examinations will be kept confidential upon a request for such materials made pursuant to the Freedom of Information Act. FOIA, a complex law designed to give citizens a window into the operations of government, contains a number of exemptions that permit the SEC to withhold the production of materials in its possession. The Dodd-Frank Wall Street Reform and Consumer Protection Act added a new confidentiality provision that attracted little attention at first, but has recently become a lightning rod for criticism.

Continue reading →

Webinar Alert: The New ADV Part 2 – What You Need to Know

Posted on September 14, 2010 by HedgeOp

HedgeOp Compliance, LLC will be holding a free webinar on September 30th called: “The New ADV Part 2 – What You Need to Know“

This seminar will focus on the following questions: (i) what are the key changes between the old and new forms?; (ii) what is the format of the new form and what content does it include?; (iii) when does the new ADV Part 2 need to filed with the SEC?

You can view more information and register for the event here.

An interesting HR topic applicable to any RIA firm…

Posted on September 10, 2010 by HedgeOp

Although the focus of Compliance Avenue is compliance issues, from time to time, we will post relevant articles from experts that apply to the business-side of the RIA. Today’s post focuses on HR issues that many workplaces may face:

After work socializing is often considered a fun way to get to know ones co-workers in a more relaxed setting. It can however stir up job pressure during these more challenging economic times.

While many employees look forward to going out with their co-workers when their work day is done, others may not be able to due to family responsibilities, transportation challenges, or personal or religions reasons. Some however may feel that if they don’t show up to social, after-work functions, they will not be considered for opportunities had they participated.

While it may be easy for a department head to unconsciously promote the employee who he had a beer with after work, and lay-off the one who didn’t show up, HR must ensure that these decisions are based upon previously established objective criteria.

Additionally HR needs to become creative in establishing other ways for employees to informally connect throughout the organization during the workday or establish an in-house social network where employees set up chat boards and bond over non-work-related issues. These days once an actual event ends, the discussion about it can continue on-line using Facebook, Twitter, etc. These social media sites allow those who weren’t able to attend by offering them the opportunity to have discussions with those who did.

Sweep Exams for Fund of Fund Advisers

Posted on September 10, 2010 by Marissa

The Wall Street Journal is reporting that the SEC’s Office of Compliance Inspections and Examinations have identified (initially) about 12 fund of fund advisers that will be receiving a sweep audit request. The scrutiny has involved firms that oversee $100 million to $15 billion in assets. The article notes that the SEC is examining whether firms that collect fees for funneling investors into hedge funds are properly overseeing investors’ money and dealing with potential conflicts of interest.

HedgeOp Announces New Personal Trading Compliance Tools

Posted on September 7, 2010 by HedgeOp

HedgeOp Compliance, LLC announced today the version 2.0 release of it’s Employee Level Filing (ELF) platform with electronic linkages to over 2,800 brokerage institutions using patented state-of-the-art technology created by Yodlee™, the leading provider of online personal financial management (PFM) and revenue-generating payments solutions and services.

The ELF version 2.0 Platform contains a streamlined compliance workflow that allows employees to instantly connect to their brokerage accounts electronically, allowing for the seamless, automatic download of transaction and holdings data for compliance review purposes.

Typically, advisers comply with rule 204A-1 by receiving paper copies of employee brokerage statements. The process of reviewing of these statements can be quite burdensome, even for smaller advisers. The ELF platform streamlines this process by allowing for electronic links and automates much of the review process for CCO’s.

To learn more about the upgraded ELF platform, click here.

AIMA to engage with U.S. authorities on implementation of Dodd-Frank Act

Posted on September 1, 2010 by Tim

The Alternative Investment Management Association (“AIMA”), a global hedge fund association, announced last week that it will meet with U.S. policymakers and supervisors in September regarding the Dodd-Frank Wall Street Reform and Consumer Protection Act. AIMA will focus its efforts on several key areas including: registration of hedge fund managers and reporting of systematically relevant data in the interests of a broader financial stability assessment; how smaller managers may be impacted by the legislation; OTC derivatives; the revised “Volcker Rule”; potential tax issues; and the goal of global regulatory consistency.

Todd Groome, Chairman of AIMA, said of the meetings:

“AIMA, as the global hedge fund association, has historically worked closely with U.S. and international supervisors, and we look forward to engaging with U.S. authorities in September and beyond regarding numerous issues related to the implementation of the Dodd-Frank Act, as well as its interaction with reforms in other jurisdictions.

“AIMA supports increased dialogue with supervisors, and the goal of improved trading and market transparency by the industry. That includes periodic reporting of data to supervisors so they may better assess broad market and potential systemic risks. Hedge funds do not present a systemic risk, but our industry can contribute to the analysis of systemic risk and financial stability.

“We also support OTC derivatives reform, including the introduction of central clearing. We believe central clearing of eligible contracts is a very important reform aimed at improving financial stability. However, we remain focused on certain implementation issues, such as direct access, governance and capital or margin requirements.

“From the outset, we have also called for a globally consistent and coordinated regulatory framework. Many of the measures that feature in the Dodd-Frank Act are being discussed in other jurisdictions, and it is desirable that there is a large degree of consistency in terms of approach and implementation. If that consistency is not achieved it could lead to unnecessary duplication and increased costs.”

AIMA expresses its views on this legislation in more detail in its June 28, 2010 statement on U.S. financial reform.

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Monthly Archives: September 2010