Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community

CategoryFund Formation

EB-5 Regional Center Program Extended Through June 30, 2021

The EB-5 Regional Center Program will be extended through June 30, 2021 as part of the Consolidated Appropriations Act, 2021. This legislation does not address the EB-5 per-country-caps limit or other major reform issues that had been raised just a short time ago in Congress but separates EB-5 Regional Center Program reauthorization from future federal spending (appropriations) bills by making...

Welcome News in Financial Circles: LIBOR Termination Extended Briefly

On November 30th, LIBOR administrator, ICE Benchmark Administration (“IBA”), announced plans to ease worries surrounding LIBOR cessation with a brief extension to June 30, 2023.  IBA’s intention is to cease publication  (i)  of 1-week and 2-month USD LIBOR at the end of 2021 and (ii) subject to compliance with applicable regulations, including as to representativeness, it does...

Let the Fundraising Begin:  SEC Harmonizes and Improves its Exempt Offering Framework

On November 2, 2020, the Securities and Exchange Commission (“SEC”) voted to amend and simplify its rules governing private-offering exemptions under the Securities Act of 1933 (the “Securities Act”) to promote capital formation (the “Amendments”).[1]  The SEC release included discussion of their intent to remain true to the key components of their mission, namely investor protection, capital...

Public Companies Oppose SEC’s Proposed Changes to Section 13(f) Disclosures

Back in July, the Securities and Exchange Commission proposed new rules that would substantially reduce the reporting thresholds for institutional investment managers (including hedge fund managers) under rule 13f-1 (and Form 13F).   Section 13(f) of the Securities Exchange Act and Rule 13f-1  (as currently in force) require that an investment manager file a report with the Commission if the...

New ESG-Related Regulatory Obligations for Private Funds

The consideration of environmental, social and governance factors alongside financial factors in the investment decision-making process are increasingly popular ways for investors to evaluate companies and funds in which they may choose to invest.  According to the most recent report from US SIF Foundation, investors held $11.6 trillion in assets chosen according to ESG criteria at the beginning...

SEC Expands Pool of Eligible Private Offering Participants

The Securities and Exchange Commission’s (SEC) recent expansion of the definition of “accredited investor” in the final rule (Final Rule) issued on August 26, 2020, allows people with professional knowledge, experience or certifications to qualify as accredited investors, which is a highly welcome step that is creating quite a buzz!!  The Final Rule is particularly beneficial to private offerings...

Welcome News for Venture Capital, Opportunity Zone and other Private Equity Funds: Federal Agencies Ease Volcker Rule Restrictions

On June 25, 2020, the Securities and Exchange Commission, Comptroller of the Currency and the Commodity Futures Trading Commission, the Federal Reserve and Federal Deposit Insurance Corporation announced a final rule that will allow banks to invest in private funds including hedge funds, qualified opportunity zone funds (QOFs), and other private equity funds. Indeed, the release specifically...

The Investor Advisory Committee Urges SEC to Take Global Lead in Requiring ESG Disclosures

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established the Investor Advisory Committee (the “IAC”) to advise the Securities and Exchange Commission (“SEC”) to protect investor interests and to promote investor confidence and the integrity of the securities marketplace.  The IAC has held three sessions on the topic of environmental, social, and governance (“ESG”)...

SEC Rule Proposal Governing Good Faith Determinations of Fair Value

Recently, the Securities and Exchange Commission (“SEC”) proposed a new regulatory framework under Rule 2a-5 of the Investment Company Act of 1940, as amended (the “40 Act”) to shed light on the role of the board of directors of a registered investment company or business development company (“Boards”) with respect to fund valuation.  Historically, Boards assign valuation using a blend of...

Not a Moment Too Soon: SEC Proposals to Ease Capital Raising Rules

On March 4, 2020, the Securities and Exchange Commission (“SEC”) issued proposed amendments (the “Proposals”) in Release No. 33-10763, “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets ” (the “Release”) affecting certain exempt offering rules to reduce impediments to fundraising under the Securities and Exchange Act of 1933...

Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community