On October 21, 2024, the Securities and Exchange Commission’s Division of Examinations (“DOE”) announced its examination priorities for 2025 (“2025 Examination Priorities”) (available here).

In this client alert, Warshaw Burstein Managing Partner Fred Cummings and Partner/ Chair of the Tax Law Group Jason Diener provide year-end updates on the Corporate Transparency Act, whose rules requiring disclosure of entity beneficial ownership are set to take effect in January.

U.S. Treasury Department's Financial Crimes Enforcement Center unit rules governing the disclosure of beneficial ownership information are currently set to become effective January 1, 2024. The new rules contain ambiguities regarding certain fundamental definitions, and do not definitively resolve issues regarding access to the beneficial owner information reported as well as mechanical aspects of the reporting procedures.

The Securities and Exchange Commission’s Division of Examinations announced its examination priorities for fiscal year 2024. Examination priorities, which are released annually, inform investors and registrants of the key risks, examination topics and priorities that DOE plans to focus on in the upcoming year.

In a recent Risk Alert, the Division of Examinations of the SEC provided guidelines explaining how it utilizes a risk-based approach for selecting SEC-registered investment advisers to examine and for determining the risk areas to examine. If you have any questions concerning how to prepare or organize for an SEC examination, please contact Meryl Wiener or your regular Warshaw Burstein attorney.

Earlier this year, the SEC staff issued a bulletin setting forth standards of conduct for broker-dealers and investment advisers with respect to their respective care obligations when providing investment advice and recommendations to retail investors (the “Bulletin”).

On February 7, 2023, the SEC’s Division of Examinations announced its examination priorities for 2023. Examination priorities are released annually and provide investors and registrants with transparency into those areas that DOE believes bring heightened risks to investors, registrants and to the integrity of the U.S. capital markets.

On May 25, 2022, the U.S. Securities and Exchange Commission (“SEC”) released proposed amendments to Rule 35d-1 (the “Names Rule”), under the Investment Company Act of 1940. The SEC believes that the amendments would enhance transparency in the asset management market and ensure that a fund’s name does not misrepresent the fund’s investments and risks.

by Meryl E. Wiener

On March 30, 2022, the Securities and Exchange Commission’s Division of Examinations (“DOE”) announced its examination priorities for 2022 (2022 Examination Priorities). Examination priorities, which are released annually, provide investors and registrants with transparency into those areas that DOE believes bring heightened risks to investors, registrants, and the markets.

by Meryl E. Wiener

A discussion of the Private Fund Adviser Risk Alert, published on Jan. 27, 2022 by the Division of Examinations of the SEC, which supplemented the compliance deficiencies observed in its earlier (2020) examination of registered investment advisers that manage private funds.

Examination priorities are released annually. The 2021 priorities highlight nine non-exhaustive areas on which DOE intends to focus during the year.

On August 26, 2020, the Securities and Exchange Commission (SEC) adopted amendments to the “accredited investor” definition in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended, that update and improve the accredited investor definition. The purpose of the amendments is to better identify investors that have sufficient knowledge and expertise to participate in investment opportunities that do not have the rigorous disclosure and procedural requirements and related investor protections, provided by registration under the Securities Act. The amendments are substantially as proposed by the SEC on December 18, 2019.

Published by Thomson Reuters Practical Law Company as part of its Global Guide series, the article addresses legal and other issues for hedge funds and their sponsors and investors. Topics covered include regulations and legislation, marketing, managers and operators, restrictions and requirements, tax, private placement and other securities laws, a market overview and upcoming reform.

The Thomson Reuters Practical Law Company Global Guide Series covers all business law areas across all major economies.  Global Guides are written by leading lawyers and provide high level overviews of key regulatory laws in different jurisdictions with detailed practical overviews of legislation and developments. 

To request a copy of “Hedge Funds in the United States: Regulatory Overview” please click here.