The Regulatory Roundup of 19 November contained details of the Private Fund Investment Advisers Registration Act 2009, which in its original form could have had implications for UK fund managers responsible for funds with U.S. investors (the ‘Kanjorski bill’ – HR 3818).
On 11 December the House of Representatives passed the ‘Wall Street Reform and Consumer Protection Act 2009 (HR 4173). Although a fairly lengthy document, tucked away is the ‘Private Fund Investment Advisers Registration Act’ under “Title V, subtitle A”. Although technically these are two separate documents, the contents of the latter virtually mirror the marked up version of the Kanjorski bill.
Of importance is the retention of the foreign private fund adviser exemption, which contains the ’15 clients’ exemption, with ‘clients’ being defined as funds rather than underlying investors in those funds. At the moment we now have three competing proposals (the third one being the ‘Dodd’ bill – see the November Roundup for details – which is under discussion) roughly trying to achieve the same objectives including the removal of current exemptions that U.S. advisers can use to avoid SEC registration. One difference with the Dodd proposal is that it leaves it to the S.E.C. to define ‘client’.
Anything passed by the House of Representatives still has to go through the Senate so there is still some way to go, but it looks increasingly likely that ‘something’ will be in place along the lines of the above in the not too distant future.
