The SEC’S 2026 Regulatory Agenda
The SEC has published its 2026 regulatory agenda (“Agenda”) and plans for rulemaking. The Agenda was historically published twice a year but beginning last year, has only been published once. For several years I have blogged about each publication. Although items on the Agenda can move from one category to the next, be dropped off altogether, or new items pop up in any of the categories (including the final rule stage), the Agenda provides valuable insight into the SEC’s plans and the influence that comments can make on the rulemaking process.
The Agenda is broken down by (i) Prerule Stage; (ii) Proposed Rule Stage; (iii) Final Rule Stage; and (iv) Long-term Actions. The Prerule, Proposed and Final Rule Stages are intended to be completed within the next 12 months and Long-term Actions are anything beyond that. This year’s Agenda, firmly reflects the current administration’s commitment to crypto technology, improving the IPO market and refining public company compliance to ease burdens. Read More »
SECの2026年規制アジェンダ
SECは2026年の規制アジェンダ（以下「アジェンダ」）および今後の規則制定計画を公表しました。アジェンダは従来、年2回公表されていましたが、昨年からは年1回の公表となっています。私はここ数年、アジェンダが公表されるたびに、その内容についてブログで取り上げてきました。アジェンダに掲載された項目は、ある段階から別の段階へ移行することもあれば、完全に削除されることもあります。また、最終規則段階を含むいずれの段階にも、新たな項目が追加される可能性があります。それでも、アジェンダはSECの今後の方針を知るうえで貴重な手掛かりとなるほか、パブリックコメントが規則制定プロセスにどのような影響を及ぼし得るかを理解するうえでも有用です。
アジェンダは、（i）規則制定前の段階、（ii）規則案の段階、（iii）最終規則の段階、（iv）長期的な措置の4つに分類されています。規則制定前の段階、規則案の段階、最終規則の段階にある項目は、今後12カ月以内の完了を目指すものとされ、長期的な措置はそれより先に実施されるものを指します。今年のアジェンダは、暗号資産技術への取り組み、IPO市場の改善、そして上場企業のコンプライアンス体制を見直して負担を軽減するという現政権の姿勢を明確に反映しています。
規則制定前の段階
規則制定前の段階には、2つの項目のみが含まれています。いずれも昨年の規則制定前の項目として掲載されていたものです。具体的には、（i）資産担保証券の登録・開示制度の改善、（ii）統合監査証跡の継続的な有効性の評価です。資産担保証券の登録・開示制度の改善について、SECは、住宅ローン担保証券を含む資産担保証券の登録募集を促進するとともに、証券化市場をさらに改善するため、規制の変更案についてパブリックコメントを募集することを検討しています。統合監査証跡の継続的な有効性の評価については、SECは、統合監査証跡（CAT）の設計や機能、収集する情報の範囲などを含め、そのあり方を包括的に見直すため、パブリックコメントを募集することを検討しています。これは、明確に定められた規制上の目的を維持しつつ、継続的なコストやデータセキュリティ上の懸念に対応するため、CATの変更の可能性を検討することを目的としています。
規則案の段階
規則案の段階には36項目が含まれており、昨年のアジェンダの18項目から大幅に増加しています。今回初めてアジェンダに加わり、規則案の項目として掲載されたものの一つが、以前から注目されていた半期報告制度です。SECは2026年5月、米国国内の上場企業が自主的に半期報告制度へ移行できるようにする規則案を公表しました。規則案の詳細については、をご覧ください。また、今回新たに加わった項目として、役員報酬の開示制度改革があります。SECは、役員報酬の開示要件を合理化するため、レギュレーションS-Kの第402項の改正を勧告することを検討しています。さらに、連邦証券法に基づく情報の電子交付を可能にする、最近公表された規則案も今回のアジェンダに新たに加わりました。この規則案については近くブログで取り上げる予定ですが、資本市場関係者からは、「ようやく実現した」と歓迎する声が上がっています。
「ファインダー」も、長年にわたりアジェンダに掲載されたり、そこから外れたりしてきましたが、今回、規則案の項目として再びアジェンダに加わりました。SECは、証券取引所法第15条(a)の適用上、「ファインダー」の規制上の位置付けに関する規則案を検討しています。SECは実際、2020年にも規則案を公表しています。詳細については、をご覧ください。ただし、この規則案はその後立ち消えとなりました。今回は、ぜひ前進することを期待したいところです。
今回のアジェンダには、個人投資家の非公開市場への投資機会を拡大するための提案も新たに加わりました。SECは、1940年投資顧問法および1940年投資会社法に基づく既存規則の改正、または新たな規則の制定を検討しています。これは、登録投資会社を通じた個人投資家の非公開市場への投資をより促進するとともに、投資顧問会社がより広範な顧客層に対して成功報酬を請求できるようにすることを目的としています。また、関連会社を証券貸借代理人とする取決めも新たに加わりました。SECは、一定の条件の下で、登録投資会社が関連会社である証券貸借代理人を利用して証券を貸し出し、当該代理人が証券貸借取引から得られる収益の一部を報酬として受け取ることを認める新たな適用除外規則を、1940年投資会社法に基づいて制定することを検討しています。今回初めてアジェンダに掲載された項目としては、一定のSEC登録済みプライベートファンド投資顧問会社に提出が義務付けられている秘密報告書であるフォームPFの改正案があります。この改正は、特定されたコンプライアンス上の負担に対応することを目的としています。また、1940年投資顧問法に基づく規則206(4)-5の改正案も新たに加わりました。同規則は、投資顧問会社による「ペイ・トゥ・プレイ」と呼ばれる慣行を禁止するもので、今回の改正案は、特定されたコンプライアンス上の負担に対応することを目的としています。
さらに新たに加わった項目として、金融機関の破綻処理に関連する取引があります。SECは、金融機関の破綻処理手続きに関連して行われる取引について、明確性を確保するための規則改正を提案することを検討しています。また、1940年投資顧問法に基づく規則204-2の改正案もアジェンダに新たに加わりました。同規則は、投資顧問会社に一定の記録の作成・保存を義務付けるものです。今回の改正案では、電子通信に関する規制の適用範囲を適切に定めるとともに、特定されたコンプライアンス上の負担に対応し、同規則の制定後に生じた技術の進展も反映することが検討されています。
今回のアジェンダには、気候関連開示規則を正式に撤回するための規則案も新たに加わりました。同規則はすでに事実上廃止された状態にありますが、SECはその撤回を正式な手続きとして明確化することを提案しています。
また、規則案の段階には、セーフハーバーを利用できるケースを「増やす」ことを目的とした規則144の改正案も引き続き含まれています。現時点では、どのようなケースを追加するのかについて、それ以上の情報は公表されていません。さらに、規則案の段階には、暗号資産の募集および販売に関する規則も引き続き含まれています。これには、一定の適用除外やセーフハーバーを設けることや、暗号資産に関する規制の枠組みを明確化することなどが含まれる可能性があります。
規則案の段階から規則制定前の段階へと分類が変更された後、再び規則案の段階に戻された項目として、外国民間発行体の規制制度の見直しがあります。これには、外国民間発行体としての適格要件や報告義務の変更などが含まれます。SECによる外国民間発行体の定義に関するコンセプト・リリースおよび意見募集について取り上げた私の2回にわたるブログ記事は、以下からご覧いただけます。 および および
規則案の項目には、引き続き、新興成長企業（EGC）に対する各種の負担軽減措置の拡充と、報告会社の提出者区分の簡素化に関する項目も含まれています。SECは、EGCに適用される負担軽減措置を拡充するとともに、提出者区分を合理化し、分類を簡素化することでコンプライアンス上の負担を軽減することを検討しています。改正案では、（i）最も小規模な上場企業について、年次報告書その他の定期報告書の提出期限を延長すること、（ii）大規模早期提出会社の定義における時価総額の基準を7億ドルから20億ドルに引き上げ、IPO後に同区分に該当するまでの期間を12カ月から60カ月に延長すること、（iii）大規模早期提出会社に該当しないすべての上場企業を非早期提出会社に再分類し、現在は小規模報告会社および新興成長企業にのみ認められている開示要件の緩和措置その他の負担軽減措置のほぼすべてを適用すること、（iv）すべての非早期提出会社をサーベンス・オクスリー法第404条(b)の遵守義務から免除すること、が提案されています。この規則案の改正について取り上げた私のブログ記事は、以下からご覧いただけます.
規則案の項目には、引き続き、登録募集制度の改革も含まれています。これには、コンプライアンス上の負担を軽減し、資本調達を促進するためのシェルフ登録制度の改正案が含まれています。シェルフ登録届出書とは、フォームS-3またはF-3で提出される登録届出書であり、上場企業が資本を調達するうえで最も重要な手段の一つです。この登録募集制度を大きく変える可能性のある規則案について取り上げた私の4回にわたるブログ記事は、以下からご覧いただけます。 および;および; および; および.
規則案の項目には、引き続き、適用除外募集制度の見直しも含まれています。SEC Read More »
SEC Fall 2022 Regulatory Agenda
On January 4, 2023, the SEC published its semiannual Fall 2022 regulatory agenda (“Agenda”) and plans for rulemaking. The Unified Agenda of Regulatory and Deregulatory Actions contains the Regulatory Plans of 28 federal agencies and 68 federal agency regulatory agendas. My favorite Commissioner, Hester M. Peirce, was quiet about the agenda, not issuing a public statement this time. Upon publication of the Spring 2022 Agenda, Commissioner Peirce ripped the Agenda as being disconnected with the SEC’s core mission and as being focused on special interest groups instead of a broad range of market participants. The Agenda is published twice a year, and for several years I have blogged about each publication.
The Agenda is broken down by (i) “Pre-rule Stage”; (ii) Proposed Rule Stage; (iii) Final Rule Stage; and (iv) Long-term Actions. The Proposed and Final Rule Stages are intended to be completed within the next 12 months and Long-term Actions are anything beyond that. The number of items to Read More »
SEC Re-Visits Executive Compensation Clawback Rules
As expected, on October 14, 2021, the SEC re-opened the comment period on proposed rules on listing standards for the recovery of erroneously awarded executive compensation (“Clawback Rules”). The Clawback Rules would implement Section 954 of the Dodd-Frank Act and require that national securities exchanges require disclosure of policies regarding and mandating clawback of compensation under certain circumstances as a listing qualification. The proposed rules were first published in July 2015 (see HERE) and have moved around on the SEC semiannual regulatory agenda from proposed to long-term and back again for years, but finally seem to be moving forward. Although the proposed rule remains unchanged from the July 2015 version, the SEC has added a few questions for comment in its re-opening release.
Background
There are currently existing rules which require the recovery of executive compensation and disclosure of such policies. In particular, Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX”) requires the CEO and CFO to reimburse Read More »
SEC Rules Requiring Disclosures for Resource Extraction Companies
As required by the Dodd-Frank Act, in December 2020, the SEC adopted final rules requiring require resource extraction companies to disclose payments made to foreign governments or the U.S. federal government for the commercial development of oil, natural gas, or minerals. The last version of the proposed rules were published in December 2019 (see HERE )The rules have an interesting history. In 2012 the SEC adopted similar disclosure rules that were ultimately vacated by the U.S. District Court. In 2016 the SEC adopted new rules which were disapproved by a joint resolution of Congress. In December 2019, the SEC took its third pass at the rules that were ultimately adopted.
The final rules require resource extraction companies that are required to file reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) to disclose payments made by it or any of its subsidiaries or controlled entities, to the U.S. federal government or foreign governments Read More »
SEC Spring 2020 Regulatory Agenda
In July 2020, the SEC published its latest version of its semiannual regulatory agenda and plans for rulemaking with the U.S. Office of Information and Regulatory Affairs. The Office of Information and Regulatory Affairs, which is an executive office of the President, publishes a Unified Agenda of Regulatory and Deregulatory Actions (“Agenda”) with actions that 60 departments, administrative agencies and commissions plan to issue in the near and long term. The Agenda is published twice a year, and for several years I have blogged about each publication.
Like the prior Agendas, the spring 2020 Agenda is broken down by (i) “Pre-rule Stage”; (ii) Proposed Rule Stage; (iii) Final Rule Stage; and (iv) Long-term Actions. The Proposed and Final Rule Stages are intended to be completed within the next 12 months and Long-term Actions are anything beyond that. The number of items to be completed in a 12-month time frame has decreased to 42 items as compared to 47 on the Read More »
SEC Investor Advisory Committee Meeting
On November 7, 2019, the SEC Investor Advisory Committee held a meeting on the topics of (i) whether investors use environmental, social and governance (ESG) data in making investment and capital allocation decisions; and (ii) the SEC’s recent concept release on harmonization of securities offering exemptions. For more on ESG matters, see HERE and for my blog on the SEC’s concept release on exempt offerings, see HERE. Both SEC Chair Jay Clayton and Commissioner Allison Herren Lee made remarks before the committee. As always, it is helpful in navigating our complex securities laws and regulatory priorities to stay informed on matters involving SEC decision makers and policy setters.
The Investor Advisory Committee was created by the Dodd-Frank Act to advise the SEC on regulatory priorities, the regulation of securities products, trading strategies, fee structures, the effectiveness of disclosure, and on initiatives to protect investor interests and to promote investor confidence and the integrity of the securities marketplace. The Dodd-Frank Read More »
SEC Publishes Report on Access to Capital and Market Liquidity
On August 8, 2017 the SEC Division of Economic and Risk Analysis (DERA) published a 315-page report describing trends in primary securities issuance and secondary market liquidity and assessing how those trends relate to impacts of the Dodd-Frank Act, including the Volcker Rule. The report examines the issuances of debt, equity and asset-backed securities and reviews liquidity in U.S. treasuries, corporate bonds, credit default swaps and bond funds. Included in the reports is a study of trends in unregistered offerings, including Regulation C and Regulation Crowdfunding.
This blog summarizes portions of the report that I think will be of interest to the small-cap marketplace.
Disclaimers and Considerations
The report begins with a level of disclaimers and the obvious issue of isolating the impact of particular rules, especially when multiple rules are being implemented in the same time period. Even without the DERA notes that noted trends and behaviors could have occurred absent rule changes or reforms. The financial crisis Read More »
Financial Choice Act 2.0 Has Made Progress
On June 8, 2017, the U.S. House of Representative passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act (the “Financial Choice Act 2.0” or the “Act”) by a vote of 283-186 along party lines. Only one Republican did not vote in favor of the Act. On May 4, 2017, the House Financial Services Committee voted to approve the Act. A prior version of the Act was adopted by the Financial Services Committee in September 2016 but never proceeded to the House for a vote.
The Financial Choice Act 2.0 is an extensive, extreme piece of legislation that would dismantle a large amount of the power of the SEC and strip the Dodd-Frank Act of many of its key provisions. The future of the Act is uncertain as it is unlikely to get through the Senate, although a rollback of Dodd-Frank remains a priority to the current administration. It is also possible that parts of the lengthy Read More »
The Acting SEC Chair Has Trimmed Enforcement’s Subpoena Power
In early February 2017, acting SEC Chair Michael Piwowar revoked the subpoena authority from approximately 20 senior SEC enforcement staff. The change leaves the Director of the Division of Enforcement as the sole person with the authority to approve a formal order of investigation and issue subpoenas. Historically, the staff did not have subpoena power; however, in 2009 then Chair Mary Shapiro granted the staff the power, in the wake of the Bernie Madoff scandal. Chair Shapiro deemed the policy to relate solely to internal SEC procedures and, as such, passed the delegation of power without formal notice or opportunity for public comment.
This is the beginning of what I expect will be many, many changes within the SEC as the new administration changes the focus of the agency from Mary Jo White’s broken windows policies to supporting capital formation. The mission of the SEC is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation. Although Read More »
SEC Proposes Shortening Trade Settlement
On September 28, 2016, the SEC proposed a rule amendment to shorten the standard broker-initiated trade settlement cycle from three business days from the trade date (T+3) to two business days (T+2). The change is designed to help reduce risks, including credit, market and liquidity risks, associated with unsettled transactions in the marketplace. Outgoing SEC Chair, Mary Jo White was quoted as saying that the change “is an important step to the SEC’s ongoing efforts to enhance the resiliency and efficiency of the U.S. clearance and settlement system.” I have previously written about the clearance and settlement process for U.S. capital markets, which can be reviewed HERE.
Background
DTC provides the depository and book entry settlement services for substantially all equity trading in the US. Over $600 billion in transactions are completed at DTC each day. Although all similar, the exact clearance and settlement process depends on the type of security being traded (stock, bond, etc.), the form the Read More »
SEC Whistleblower Awards Pass $100 Million As It Continues To Crack Down On Confidentiality Provisions In Employment Agreements
The SEC has proudly announced that including a $22 million award on August 30, 2016, its whistleblower awards have surpassed $100 million. The news comes in the wake of two recent SEC enforcement proceedings against companies based on confidentiality and waiver language in employee severance agreements. Like two prior similar actions, the SEC has taken the position that restrictive language in confidentiality, waiver or settlement agreements with employees violates the anti-whistleblower rules adopted under Dodd-Frank.
Background – The Dodd-Frank Act Whistleblower Statute
The Dodd-Frank Act, enacted in July 2010, added Section 21F, “Whistleblower Incentives and Protection,” to the Securities Exchange Act of 1934 (“Exchange Act”). As stated in the original rule release, the purpose of the rule was “to encourage whistleblowers to report possible violations of the securities laws by providing financial incentives, prohibiting employment related retaliation, and providing various confidentiality guarantees.” Upon enactment of Section 21F, the SEC established the Office of the Whistleblower and created the SEC Whistleblower Read More »
House Passes More Securities Legislation
In what must be the most active period of securities legislation in recent history, the US House of Representatives has passed three more bills that would make changes to the federal securities laws. The three bills, which have not been passed into law as of yet, come in the wake of the Fixing American’s Surface Transportation Act (the “FAST Act”), which was signed into law on December 4, 2015.
The 3 bills include: (i) H.R. 1675 – the Capital Markets Improvement Act of 2016, which has 5 smaller acts imbedded therein; (ii) H.R. 3784, establishing the Advocate for Small Business Capital Formation and Small Business Capital Formation Advisory Committee within the SEC; and (iii) H.R. 2187, proposing an amendment to the definition of accredited investor. None of the bills have been passed by the Senate as of yet.
Meanwhile, the SEC continues to finalize rulemaking under both the JOBS Act, which was passed into law on April 5, Read More »
SEC Gives Insight On 2016 Initiatives
SEC Chair Mary Jo White gave a speech at the annual mid-February SEC Speaks program and, as usual, gave some insight into the SEC’s focus in the coming year. This blog summarized Chair White’s speech and provides further insight and information on the topics she addresses.
Consistent with her prior messages, Chair White focuses on enforcement, stating that the SEC “needs to go beyond disclosure” in carrying out its mission. That mission, as articulated by Chair White, is the protection of investors, maintaining fair, orderly and efficient markets, and facilitating capital formation. In 2015 the SEC brought a record number of enforcement proceedings and secured an all-time high for penalty and disgorgement orders. The primary areas of focus included cybersecurity, market structure requirements, dark pools, microcap fraud, financial reporting failures, insider trading, disclosure deficiencies in municipal offerings and protection of retail investors and retiree savings. In 2016 the SEC intends to focus enforcement on financial reporting, market structure, and the Read More »
SEC Congressional Testimony- Part I
On three occasions recently representatives of the SEC have given testimony to Congress. On March 24, 2015, SEC Chair Mary Jo White testified on “Examining the SEC’s Agenda, Operations and FY 2016 Budget Request”; on March 19, 2015, Andrew Ceresny, Director of the SEC Division of Enforcement, testified to Congress on the “Oversight of the SEC’s Division of Enforcement”; and on March 10, 2015, Stephen Luparello, Director of the Division of Trading and Markets, testified on “Venture Exchanges and Small-Cap Companies.” In a series of blogs, I will summarize the three testimonies. This first blog in the series summarizes the testimony of Mary Jo White.
Mary Jo White Testimony
On March 24, 2015, SEC Chair Mary Jo White gave testimony before the United States House of Representatives Committee on Financial Services. The testimony was titled “Examining the SEC’s Agenda, Operations and FY 2016 Budget Request.” As can be gleaned from the title, Mary Jo White was giving testimony in support Read More »
SEC Cracks Down On Confidentiality Agreements As Violating Whistleblower Rights And Protections
On April 1, 2015, the SEC announced its first filed, and settled, enforcement action against a company for using improperly restrictive language in confidentiality agreements as a method to stifle or retaliate against whistleblowers.
In recent months, the SEC has been issuing requests to companies for copies of confidentiality agreements, non-disclosure agreements, employment agreements, severance agreements and settlement agreements entered into with employees and former employees of the companies. The initiative specifically requests copies of documents since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and, in particular, the provisions of the Dodd Frank-Act which grant awards and protections for whistleblowers.
In addition, the SEC has been asking for copies of company human resource policies, employee memos, training guides and any and all documents that discuss “whistleblowers” either directly or indirectly. According to a Wall Street Journal article on the subject, the SEC believes that corporations are retaliating against potential Read More »
Say-On-Pay for Smaller Reporting Companies
Effective April 4, 2011, the SEC adopted final rules implementing shareholder advisory votes on executive compensation as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Upon enactment smaller reporting companies were given a two-year exemption from the compliance requirements. Smaller reporting companies are defined as entities which, as of the last business day of their second fiscal quarter, have a public float of less than $75 million. Beginning in 2013, that exemption expired and now these smaller reporting companies are required to include say-on-pay voting. Although smaller reporting companies have been subject to the rules for a year now, I still encounter questions from the entities as to their obligations and requirements under the rules.
The say-on-pay rules were implemented by adding Section 14A, which requires companies to conduct a separate shareholder advisory vote to approve the compensation of executives, which pay is disclosed pursuant to Item 402 (the “say-on-pay” vote). Read More »
An Overview of Exemptions for Hedge Fund Advisors: Exemptions for Advisors to Venture Capital Funds, Private Fund Advisors with Less Than $150 Million in Assets Under Management, and Foreign Private Advisors – Part IV
The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made significant changes as well.
In particular, the Dodd-Frank Act eliminated the oft relied upon exemption from registration for private hedge fund advisors for those advisors with fewer than 15 clients. While eliminating the private advisor exemption, Dodd-Frank created three new exemptions, which are the operable hedge fund advisor exemptions today. These exemptions are for:
(1) Advisors solely to venture capital funds;
(2) Advisors solely to private funds with less than $150 million in assets under management in the U.S.; and
(3) Certain foreign advisers without a place of business in the U.S.
Moreover, the Read More »
Will FINRA Rule Changes Related to Private Placement Further Deter Broker Dealers From Placing the Securities of Small Businesses?
On August 19, 2013, FINRA published Regulatory Notice 13-26 about the updated Private Placement Form that firms must file with FINRA when acting as a placement agent for the private placement of securities. A copy of the form is included with the regulatory notice at www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p325359.pdf. The Form went effective on July 1, 2013. FINRA has also updated the FAQs relating to the Private Placement Form. The updated Private Placement Form has six new questions:
- Is this a contingency offering?
- Does the issuer have
An Overview of Exemptions for Hedge Fund Advisors: Exemptions for Advisors to Venture Capital Funds, Private Fund Advisers with Less Than $150 Million in Assets Under Management, and Foreign Private Advisers – Part III
As the rules that will allow general solicitation and advertising for Rule 506(c) and 144A offerings near effectiveness, our firm has noticed a spike in inquiries related to small hedge funds and feeder funds. The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made significant changes as well.
In particular, the Dodd-Frank Act eliminated the oft relied upon exemption from registration for private hedge fund advisors for those advisors with fewer than 15 clients. While eliminating the private advisor exemption, Dodd-Frank created three new exemptions, which are the operable hedge fund advisor exemptions today. These exemptions are for:
(1) Advisors Read More »
An Overview of Exemptions for Hedge Fund Advisors: Exemptions for Advisors to Venture Capital Funds, Private Fund Advisers with Less Than $150 Million in Assets Under Management, and Foreign Private Advisers – Part II
As the delayed JOBS Act rule changes become imminent, our firm has noticed a spike in inquiries related to small hedge funds and feeder funds.The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made significant changes as well.
In particular, the Dodd-Frank Act eliminated the oft relied upon exemption from registration for private hedge fund advisors for those advisors with fewer than 15 clients.While eliminating the private advisor exemption, Dodd-Frank created three new exemptions, which are the operable hedge fund advisor exemptions today.These exemptions are for:
(1) Advisors solely to venture capital funds;
(2) Advisors solely to private funds with less than $150 million in assets under management in the U.S.; and
(3) Certain foreign advisers without a place of business in the U.S.
Moreover, the Dodd-Frank Private Fund Investment Advisers Registration Act of 2010 (the “Advisers Act“) imposed Read More »
An Overview of Exemptions for Hedge Fund Advisers: Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers with Less Than $150 Million in Assets Under Management, and Foreign Private Advisers – Part I
As I have blogged about in the past, the JOBS Act will have a significant impact on hedge funds, and in particular smaller hedge funds. As the delayed rule changes become imminent, our firm has noticed a spike in inquiries related to small hedge funds and feeder funds. The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made a significant impact as well.
In particular, the Dodd-Frank Act eliminated the oft-relied upon exemption from registration for private hedge fund advisers for those advisers with fewer than 15 clients. While eliminating the private adviser exemption, the Dodd-Frank created three new exemptions, which are the operable hedge fund adviser exemptions today. These exemptions are for:
(1) Advisers solely to venture capital funds;
(2) Advisers solely to private funds with less than $150 million in assets under management in the U.S.; and
(3) Certain Read More »
COMPREHENSIVE REVIEW OF TITLE I OF THE JOBS ACT AS RELATED TO EMERGING GROWTH COMPANIES
On April 5, 2012, President Obama signed the Jumpstart our Business Startups Act (JOBS Act) into law. The JOBS Act was passed on a bipartisan basis by overwhelming majorities in the House and Senate. The Act seeks to remove impediments to raising capital for emerging growth public companies by relaxing disclosure, governance and accounting requirements, easing the restrictions on analyst communications and analyst participation in the public offering process, and permitting companies to “test the waters” for public offerings. The following is an in-depth review of Title I of the JOBS Act related to Emerging Growth Companies.
Introduction – What is an Emerging Growth Company?
The JOBS Act created a new category of company: an “Emerging Growth Company” (EGC). An EGC is defined as a company with annual gross revenues of less than $1 billion that first sells equity in a registered offering after December 8, 2011. In addition, an EGC loses its EGC status on the earlier Read More »
Dodd-Frank Act Changes Definition Of Accredited Investor Effective Immediately
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). After many revisions, the final Dodd-Frank Act has only minor effects on securities Issuers and their investors. The primary change, which takes effect immediately, is a modification to the definition of “accredited investor” contained in the Securities Act of 1933. In particular: (i) as it relates to natural persons, the $1,000,000 net worth standard must now be calculated excluding the value of the primary residence of such natural person; and (2) the Securities and Exchange Commission (SEC) has been mandated to review the entire accredited investor definition within four (4) years and make appropriate changes within that time, without additional act of Congress.
Increased Net Worth Requirements
This change effectively increases the net worth requirements for investors, whose largest asset is often their primary residence. Although the SEC has not yet issued any guidance or other information on the change, Read More »
