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

CategoryVenture Capital

Bi-Partisan Legislation Introduced to Extend OZ Investment Period to 2028

House of Representatives Propose Legislation to Extend the Opportunity Zone Tax Deferral for Two Additional years. The Opportunity Zones Extension Act would extend the capital gains tax deferral date to permit the deferral of capital gains until the end of 2028. This Bi-Partisan legislation is intended to attract additional private sector investment in underserved communities. Rimon Law has an...

Taxation of Carried Interests is Reignited by Recent Congressional Bill

Representatives Bill Pascrell (D-NJ), Andy Levin (D-MI) and Katie Porter (D-CA) released H.R. 1068[1] on February 16, 2021, known as the “Carried Interest Fairness Act” (the “Act”).  The Carried Interest Fairness Act would tax carried interest compensation at ordinary income tax rates and treating it as wage income subject to employment taxes.  Capital gains taxation would still apply to general...

IRS Notice Extends Several Opportunity Zone Investment Deadlines

The Internal Revenue Service (IRS) issued Notice 2021-10 on January 19, 2021 that extends several deadlines related to investments in qualified opportunity zones (QOZ) and by qualified opportunity funds (QOFs). 180-Day Window Extended.  Of particular importance, Notice 2021-10 provides an extension to taxpayers’ 180 day reinvestment window in QOFs due to the COVID-19 pandemic.  Henceforth...

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...

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...

September 30, 2020’s LIBOR Hardwired Transition Date Has Arrived

Today is the day that the New York Fed’s Alternative Reference Rates Committee (ARRC) recommended transition to a “hardwired” approach for LIBOR[i] successor provisions in U.S. dollar-denominated syndicated credit facilities takes effect.  Henceforth, to the extent not already utilized, all new syndicated business loans should include ARRC-recommended (or substantially similar) hardwired USD...

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...

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