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CALIFORNIA CORPORATE & SECURITIES LAW

California’s Other Investment Adviser Law

California’s Corporate Securities Law of 1968 defines and provides for the comprehensive regulation of most, but not all, investment advisers.  Some investment advisers are subject to an entirely different law found in the California Civil Code – Section 3372. Section 3372 applies to any person “engaged in the business of advising others for compensation as to the…

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Proxy Advisory Firms – What About State Registration?

Yesterday’s post discussed why proxy advisory firms are likely to meet the definition of “investment adviser” under the Investment Advisers Act of 1940.  I noted that some proxy advisory firms, such as ISS and Marco Consulting Group, Inc., have, in fact, registered with the Securities and Exchange Commission as investment advisers.  Other proxy firms are not registered…

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Commissioner Files Private Fund Adviser Exemption With The Office Of Administrative Law

Almost There On July 16, 2012, the Commissioner of Corporations filed with the Office of Administrative Law proposed amendments to Rule 260.204.9.  These amendments will create a new framework for exempting advisers to private pooled investment vehicles from the investment adviser registration requirement under the Corporate Securities Law of 1968. OAL review is the prepenultimate step towards…

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Commissioner Invites Comments On Adopting New Custody Rule

Investment advisers frequently have custody, either directly or indirectly, of their clients’ assets.  Obviously, custody of another’s assets can lead to infidelity.  In the word’s of the satirist Juvenal, the question necessarily becomes “sed quis custodiet ipsos custodes? (but who shall guard the guards?). In the case of registered investment advisers, securities regulators are the…

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How Soon Hath Time! July 21 Deadline Looms For Investment Advisers But Grace May Be At Hand

The hasting days fly on with full career while the SEC proceeds with rulemaking to implement the Dodd-Frank Act’s changes to the regulation of investment advisers.  Last week, Associate Director Robert E. Plaze in the SEC’s Division of Investment Management confirmed that the SEC intendes to complete required rulemaking by July 21, 2011 in this letter to David Massey, the President…

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Video: What’s In Store For California’s Exemption For Venture Capital Fund Managers?

View the video Managers of venture capital funds have largely avoided registration as investment advisers.   The Dodd-Frank Act has significantly changed the exemptions from federal registration and will cause California change its exemptions as well.  This video discusses what may be in store for venture capital managers.

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Commissioner To Ask For Comments On Rule 260.204.9

Look for the Commissioner of Corporations to be issuing a solicitation for comments on proposed changes to Rule 260.204.9.  As will be discussed in a Guest Blog to be posted on Monday, the Commissioner has announced that he is considering changes to Rule 260.204.9 in light of the enactment of the Dodd-Frank Act last summer.  Currently,…

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Department of Corporations Invites Comment on Adviser Rules

This morning, the California Department of Corporations issued this Invitation For Comments with respect to its investment adviser rules.  The Department had proposed an “omnibus” revision to its investment adviser regulations way back in 2007.  Unfortunately, events, including changes to the Securities and Exchange Commission’s investment adviser rules, have overtaken that proposal.  The Department is seeking comment on the…

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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…

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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…

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