Have You Been Dodd-Frank'ed?
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Transcript of Have You Been Dodd-Frank'ed?
Have you been Dodd-Frank’ed?
Do You Need to Register as an Investment Adviser?
Compliance Program
• Chief Compliance Officer• Code of Ethics• Intense Record-Keeping• Insider Trading Policy• Political Contribution Controls
What Do You Need?
• Proxy Voting• Best Execution• Custody of Securities• Soft Dollar
What Do You Need? (less relevant)
What Else Should You Have
• Investment Allocation• Valuation Policy• Affiliate transaction controls
Assess compliance risks, and identify where the fund’s best interest is not aligned with the best interest of the fund manager
Risk-Based Policies
Insider Trading
• Annual Holdings Report• Quarterly Transactions Report• Pre-clear IPO• Pre-clear Private Placements• Pre-clear all trades?• Access persons
Insider Trading – Access Person
• Anyone with access to non-public information regarding the fund’s purchase or sale of securities
• Anyone involved in making securities recommendations
• Directors• Officers• Partners
Need to be in compliance when you file the Form ADV
Need to Register by July 21, 2011
(that means file at 45 days prior to then)
Running Start
Rule 206(4)-7:
Review, no less frequently than annually, the adequacy of the policies and procedures established pursuant to this section and the effectiveness of their implementation
It’s Never Over
Custody Rule
Accredited Investor
Pay-to-Play
SEC Rule 206(4)-5
1. Limits the use of third party placement agents
2. Limits campaign contributions
Bans the use of third party placement agents, unless they are• Registered investment advisersor•Registered broker dealers (If FINRA enacts a similar rule)
SEC Rule 206(4)-5
Prohibits collecting fees from a government client for two years, if:• A covered associate • Makes a political contribution• To a government official or candidate• For an office that can influence, directly or indirectly,
the decision to hire the investment adviser
SEC Rule 206(4)-5
• Registered• Unregistered and relying on exemption (dated)• Treats government investor as direct instead of
through the fund
Application to Fund Managers
Candidate for an elective office :• that can directly or indirectly influence the hiring of
an investment adviser,
or• has the authority to appoint a person who can
directly or indirectly influence the hiring of an investment adviser
Political Officials
Two year “time out” on receiving advisory compensation is NOT triggered for contributions:• For a candidate you can vote for: $350• For a candidate you can’t vote for: $150
In the aggregate per election - Primary and general election are separate
De Minimis Exception
• General partner or managing member• Employees who solicits a government entity for the
investment adviser and any person who supervises, directly or indirectly, such employee
• “Executive officers”
Covered Associate
• President• Any vice president in charge of a principal business
unit, division or function• Any other officer who performs a policy-making
function• Any other person who performs similar policy-
making functions
Covered Associate -Executive Officer
Policy
• Who to include as a “covered associate”• Reporting of all political contributions• Pre-clearance of political contributions• Pre-clear new hires• March 2011 Compliance Deadline
Policy Considerations
John SchneiderKPMG [email protected]
Paul SchwartzGoodwin Procter [email protected]
Doug CorneliusBeacon Capital Partners, [email protected]://www.ComplianceBuilding.com
Contact Information
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Contact Information