This yearly report provides a summary of some of the significant changes and developments that occurred in the past year in the hedge fund and private equity spaces, as well as certain recommended practices that investment advisers should consider when preparing for 2021.
Highlights from the review include:
- A summary of SEC examination priorities and enforcement developments impacting the private funds industry, including a review of recent staff-level guidance, allocation of fees and expenses and conflicts of interest
- A review of SEC policy and rulemaking initiatives, including the recent adoption of amendments to both the advertising rule under the Investment Advisers Act of 1940 and the “accredited investor” definition under the Securities Act of 1933 and also the SEC’s proposed conditional exemption from federal broker registration for certain “finders” who assist issuers in raising capital in private placements with accredited investors
- An analysis of the current state of insider trading law, including analysis of two important decisions from the U.S. Court of Appeals for the Second Circuit, one addressing insider trading in breach of a confidentiality agreement, and another making clear that the U.S. government can bring criminal charges for insider trading without needing to establish that the tipper of material, nonpublic information breached a fiduciary duty or received an improper personal benefits. This year’s update also analyzes criminal charges filed against a hedge-fund founder for allegedly misusing confidential information he obtained through his service on the creditors’ committee of a bankrupt issuer
- S. and UK tax updates, including an overview of updates to U.S. regulations providing guidance on section 1061 of the Internal Revenue Code of 1986 with respect to carried interest, and also important developments in relation to the sixth version of the European Union’s Directive on Administrative Co-operation (DAC6)
An extensive review of employment law developments at the federal and state level potentially impacting advisers, including developments in the areas of harassment and discrimination, diversity and representation, safe and sick leave laws and COVID-19 anti-retaliation measures
- Developments relating to cybersecurity and privacy law, including a review of the U.S. Department of Justice guidance on legal considerations when gathering online cyber threat intelligence and purchasing data from illicit sources and the updates by the U.S. Attorney General’s cyber-digital task force to the cryptocurrency enforcement framework
- Regulatory developments in the European Union, including an update on the impact of Brexit and the expected loss of the financial services cross-border “passport” for the UK and the new rules relating to the pre-marketing of funds coming into force in August 2021
- A comprehensive overview of required U.S. regulatory filings across the many agencies overseeing the private funds industry, including a quick reference table for monthly filings in 2021
Please see full publication below for more information.
