Download - Have You Been Dodd-Frank'ed?
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Have you been Dodd-Frank’ed?
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Do You Need to Register as an Investment Adviser?
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Compliance Program
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• Chief Compliance Officer• Code of Ethics• Intense Record-Keeping• Insider Trading Policy• Political Contribution Controls
What Do You Need?
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• Proxy Voting• Best Execution• Custody of Securities• Soft Dollar
What Do You Need? (less relevant)
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What Else Should You Have
• Investment Allocation• Valuation Policy• Affiliate transaction controls
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Assess compliance risks, and identify where the fund’s best interest is not aligned with the best interest of the fund manager
Risk-Based Policies
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Insider Trading
• Annual Holdings Report• Quarterly Transactions Report• Pre-clear IPO• Pre-clear Private Placements• Pre-clear all trades?• Access persons
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Insider Trading – Access Person
• Anyone with access to non-public information regarding the fund’s purchase or sale of securities
• Anyone involved in making securities recommendations
• Directors• Officers• Partners
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Need to be in compliance when you file the Form ADV
Need to Register by July 21, 2011
(that means file at 45 days prior to then)
Running Start
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Rule 206(4)-7:
Review, no less frequently than annually, the adequacy of the policies and procedures established pursuant to this section and the effectiveness of their implementation
It’s Never Over
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Custody Rule
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Accredited Investor
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Pay-to-Play
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SEC Rule 206(4)-5
1. Limits the use of third party placement agents
2. Limits campaign contributions
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Bans the use of third party placement agents, unless they are• Registered investment advisersor•Registered broker dealers (If FINRA enacts a similar rule)
SEC Rule 206(4)-5
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Prohibits collecting fees from a government client for two years, if:• A covered associate • Makes a political contribution• To a government official or candidate• For an office that can influence, directly or indirectly,
the decision to hire the investment adviser
SEC Rule 206(4)-5
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• Registered• Unregistered and relying on exemption (dated)• Treats government investor as direct instead of
through the fund
Application to Fund Managers
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Candidate for an elective office :• that can directly or indirectly influence the hiring of
an investment adviser,
or• has the authority to appoint a person who can
directly or indirectly influence the hiring of an investment adviser
Political Officials
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Two year “time out” on receiving advisory compensation is NOT triggered for contributions:• For a candidate you can vote for: $350• For a candidate you can’t vote for: $150
In the aggregate per election - Primary and general election are separate
De Minimis Exception
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• General partner or managing member• Employees who solicits a government entity for the
investment adviser and any person who supervises, directly or indirectly, such employee
• “Executive officers”
Covered Associate
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• President• Any vice president in charge of a principal business
unit, division or function• Any other officer who performs a policy-making
function• Any other person who performs similar policy-
making functions
Covered Associate -Executive Officer
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Policy
• Who to include as a “covered associate”• Reporting of all political contributions• Pre-clearance of political contributions• Pre-clear new hires• March 2011 Compliance Deadline
Policy Considerations
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John SchneiderKPMG [email protected]
Paul SchwartzGoodwin Procter [email protected]
Doug CorneliusBeacon Capital Partners, [email protected]://www.ComplianceBuilding.com
Contact Information
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Contact Information