SEC Relies On Questionable Legislative History In Proposed VC Definition
I’m still cogitating on the Securities and Exchange Commission’s definition of “venture capital fund” that it proposed last Friday in Release No. IA-3111. Here are some first impressions. The SEC considered California’s definition of “venture capital companies” in 10 CCR § 260.204.9 but felt that California’s rule was inconsistent with Congressional intent because the California rule doesn’t limit investments to Read more...
Defining “Venture Capital Fund” Is “No Small Task”
Today, the Securities and Exchange Commission proposed a definition of “venture capital fund” for purposes of the new exemption from investment adviser registration under the Investment Advisers Act of 1940. This new exemption was created by Section 407 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Congress gave the SEC one year to issue final rules defining “venture capital Read more...
SEC Will Consider Definition of “Venture Capital Fund” This Week
Section 407 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Securities and Exchange Commission to issue rules defining “venture capital fund”. As discussed in this earlier post, the definition is needed to implement the Dodd-Frank Act’s new Investment Advisers Act exemption for investment advisers solely to one or more venture capital funds. Doug Cornelius at Compliance Building writes that the SEC Read more...
FPPC Proposes Rule Amendment To Implement Placement Agent Legislation
The California Fair Political Practices Commission (FPPC) is charged with regulation of, among other things, lobbyist registration and reporting. As discussed in several earlier posts, AB 1743 (Hernandez) amends the definition of “lobbyist” in Government Code § 82039 to include placement agents. AB 1743 defines “placement agent” in a newly added Government Code § 82047.3. These and the other provisions of AB 1743 take Read more...
Rule 260.204.9 – What is to be Done (Part II)?
Last August, I wrote about the impact of the Dodd-Frank Act on Rule 260.204.9 in this post. Last Thursday, I attended a meeting called by the Department of Corporations to solicit input from persons with an interest in the rule. Technically, the meeting was held in accordance with Government Code § 11346.45. That statute requires state agencies to “involve parties Read more...
Must A Fund’s General Partner Be Registered?
The typical responsibilities of a general partner of an investment limited partnership are to handle the business and administrative aspects of the fund. In return, the general partner is compensated – often, based on a percentage of the assets under management. This structure, of course, creates the question whether the general partner must be registered as an investment adviser. In Read more...
New Form ADV Part 2 Has Now Arrived In California
As a reminder, the California Department of Corporations this week began allowing investment adviser applicants and licensed investment advisers filing amendments to their Part II of Form ADV to use either the current Part II or the new Part 2 to Form ADV. For more on this topic, see my earlier post.
SEC’s Proposed “Family Office” Rule and Rule 260.204.9
In The Snows of Kilimanjaro, Ernest Hemingway wrote: “‘The very rich are different from you and me.’ And how someone had said to Julian, ‘Yes, they have more money.’” That is certainly true in the case of the families described in the Securities and Exchange Commission’s recently proposed family office rule. According to the SEC, “family offices” are established by Read more...
Governor Signs Flawed Placement Agent Bill
Yesterday, Governor Arnold Schwarzenegger signed AB 1743 (Hernandez). As discussed in previous posts, this bill will required placement agents for funds and advisers seeking access to CalPERS to register as lobbyists. As such, they will not be able to obtain success fees. Marc Lifsher provides more background on AB 1743 in this Los Angeles Times article. The California Public Employees Retirement System (CalPERS) Read more...
Senior-Specific Specifications Can Spell Trouble Under the CSL
Recently, the Securities and Exchange Commission announced that it had charged an investment adviser in Colorado with fraudulently recommending hedge funds to older investors. In California, we have a statute, Corporations Code Section 25234.5, that specifically prohibits broker-dealers and investment advisers, or their respective agents or representatives, from using a senior specific professional designation in the offer or sale of Read more...
