SEC and FSA – How to Deal Them?

by Dori Tery on January 15, 2013

SEC and FSA – Trying To Live With Two Bosses

The Securities and Exchange Commission (SEC) has agreed rules & regulations that pass and implement the Dodd Frank Act Title IV requirements and this has brought all of the non-United States hedge fund and private equity managers under its mistake from March 30, 2012; this also can even be where fund and private equity managers have no, or very limited, business activities in the United States. By putting this piece of the rule Dodd Frank Wall Street Reform and Consumer Protection Act 2010, the United States is the first country to bring legislation that will have a significant impact, but it has affected the investment managers in the states and globally.

Who is covered by this requirement made by SEC and FSA?

If there are more than fifteen United States investors in any non-public funds controlled or managed by the private company, or the company is allowed to give advises or provide direct management in more than twenty five millions investment or any assets attributable to country investors, the SEC will most probably want to understand more from that company. If less than fifteen millions of individual fund assets are managed from any location in the United States, the company can be requested for Exempt Reporting Adviser (ERA) status. So how will Dodd Frank rules passed in White House impact the most of fund managers in London, or any fund manager responsible for the assets of United State investors?

SEC has provided different proposals for those caught by Dodd Frank rule:
– Beside all of the fund manager shall submit an annual reporting minimum for funds subject to ERA, the SEC will also ask for additional books and record keeping requirements.
– While the United Kingdom Financial Services Authority (FSA) has made its own hedge fund special survey to help understand the effect of the alternative sector, the SEC’s data collection has covered broader scope than previously required.
– The recent Rule 204-2 of the Investment Advisers Act outlines the books and record keeping requirements of a SEC registered adviser. But the SEC does not provide the types of books and records an ERA should keep; it is likely that these will essential to meet this fundamental for documentation standards.

sec and fsaFurthermore, the requirements for a completely registered firm are boarder; the companies are expected to keep up a compliance programme, engage a chief compliance officer and take on an annual compliance evaluation. There are the same requirements under FSA rules and companies would do well to exploit potential working together in their compliance mistake. SEC-registered companies are also mandatory to make sure a code of ethics and policies and measures to prevent and flight the risk of insider dealing.

Most of the UK managers will not be blown up by SEC custody rules, save for confirming that they have no right over the withdrawal of moneys from customers’ accounts and for safeguarding the fund is examined and its financial statements.

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