The Securities Litigation Expert Blog

Hedge funds and private equity funds are having to build out their compliance capabilities due to new rules under the Dodd-Frank Act, the New York Law Journal reports.  (NLLJ)  The most interesting fact of the article may be this:

In addition, scores of regulations have been issued under Dodd-Frank and there are more to come. Only one third of the 398 requirements under Dodd-Frank have been written into rules, according to a Davis Polk & Wardwell analysis. Another third have been written into proposed rules while the final third have yet to be proposed.

"If the pace of new regulation continues the way we've seen in the last year or two, I think more and more [financial services] firms will be adding to their legal and compliance departments," said Adam Reback, a chief compliance officer at hedge fund J. Goldman & Co. "It means more filings, it means more leg work, it means more monitoring. You just need more people to get it done" and more resources.

As a result of the Dodd-Frank legislation, hedge fund, private equity fund and other fund managers are having to register as Investment Advisors with the SEC.  This is a significant development as trillions of assets are now coming under the aegis (and scrutiny) of the SEC.  We will have more commentary on this later, but here are some initial links for your review:

• SEC Press Release (SEC)


• SEC Statistics on Private Fund Advisors (SEC)


• Final Rule Implementing Amendments to the Investment Advisor Act of 1940 (17 CFR Parts 275 and 279)


• SEC National Exam Program for Newly Registered Investment Advisors (Office of Compliance Inspection and Examination)


• State Registration of "Mid-Sized Advisors" (Those with assets between $25 and $100 million)  (Release No. IA-3490)


• IARD website for information about Investment Advisors (IARD)