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CALIFORNIA CORPORATE & SECURITIES LAW

Are REITS Investment Advisers?

A REIT is an acronym for Real Estate Investment Trust, although the term more properly refers to tax status than a specific entity type.  For a variety of reasons, a REIT may involve several different types of entities.  The raison d’être of REITS is to provide a tax-preferred mechanism for investment in a professionally managed…

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Commissioner Proposes Successor To Rule 260.204.9

With the enactment of the National Securities Markets Improvement Act of 1996, Congress divided registration authority over investment advisers between the Securities and Exchange Commission and state securities regulators.  In general, large advisers (i.e., those with at least $25 million in assets under management) were required to register with the SEC and smaller advisers were subject to…

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Commissioner Announces Action To Alleviate Exempt Adviser Uncertainty

This afternoon, Commissioner Preston DuFauchard released this letter regarding the upcoming demise of the federal private adviser exemption (Section 203(b)(3) of the Investment Adviser Act of 1940).  The Commissioner’s letter is in response to concerns about the continued viability of Rule 260.204.9 which explicitly refers to Section 203(b)(3).  Essentially, the Commissioner is announcing that he will be issuing emergency…

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Commissioner Previews Potential Private Fund Adviser Rule Changes

If you’re reading this blog, then you had a better Ides of March than Julius Caesar did in 44 B.C.E.  In this March 5 post, I reported that the Commissioner of Corporations would be seeking comments on proposed amendments to Rule 260.204.9.  Yesterday, the Commissioner issued this Invitation for Comments.  As discussed in several earlier posts,…

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Guest Post: Are Some California Fund Manager Performance Fees in Doubt?

By Matthew J. Ertman The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) repeal of the private adviser exemption could eliminate the ability of some California fund managers to charge performance fees (often referred to as the manager’s carried interest). Effective July 21, 2011, private equity, venture capital and hedge fund managers will…

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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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Video: Dodd-Frank Act To Increase State Oversight Of Hedge Fund Advisers

Watch the video In enacting the Dodd-Frank Act, Congress significantly altered the regulatory landscape for hedge fund advisers by eliminating (effective July 21, 2011) the fewer-than-fifteen client exemption from registration pursuant to Section 203(b)(3) of the Investment Advisers Act of 1940.  At the same time, Congress increased the assets under management threshold for registration as an investment adviser…

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