SEC to require non-US asset managers to register under Dodd-Frank act

Hedge fund managers based outside the US with over $25 million in assets from US investors may need to register with the Securities and Exchange Commission (SEC) under new financial legislation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, will apply to non-US fund managers with over 15 US investors and/or more than $25 million of assets from investors based in the US. Funds caught by the legislation will need to develop a compliance manual, a code of ethics and a compliance monitoring programme that meets SEC requirements.

Funds will also be expected to undertake an annual review and testing of the compliance programme as well as participate in yearly compliance training.

Karen Anderberg, partner at law firm Dechert in London, said numerous hedge fund managers will be caught by the requirements. She said many fund managers were concerned by the legislation.

“It is going to be costly with the additional regulation. Fund managers are going to have to have a chief compliance officer with knowledge of SEC requirements,” said Anderberg.

Steve Whittaker, a partner at law firm Simmons & Simmons, said the regulations did not appear to be particularly onerous for hedge funds and said many fund managers did not seem too concerned. “It’s not as difficult as the UK’s FSA regulation,” he added.

Whittaker said most fund managers will register, especially if they are dealing with major investors in the US.

The Alternative Investment Management Association (Aima), the global hedge fund industry association, also expressed concerns at the new requirements.

“If non-US hedge fund managers are subject to supervisory standards outlined by the G20 and the US, including similar reporting requirements and agreed information-sharing arrangements, then there should be an exemption from additional US registration for non-US hedge fund managers,” said Aim chairman Todd Groome.

Groome added that multiple registrations where a manager would have to report to two or more supervisors would create “unnecessary administrative costs.” This, he said, would act as a barrier to entry deterring smaller managers and ultimately limiting investor choice.

The SEC’s new task of registering and supervising non-US fund managers caught by the new rules would be a serious challenge, warned Groome.

“This would place a massive burden on the SEC’s workload and challenge their existing supervisory capacity, and thus would not be supportive of the broader financial stability objectives,” said Groome.

http://www.hedgefundsreview.com/hed...uire-us-asset-mangers-register-dodd-frank-act

 

also catches any USers 'undeclared income'

 

Hedge fund managers always said "you'll just drive our business offshore". Now that option is gone.

It's getting so you'll have to consider what negative counter-moves the U.S. government will enact on your business when you choose to be free.............

 

i feel like it'd be simple to get around this really for anyone who wanted to. just set up an internationally based company- give them the money, and have that foreign based company do the investing in your hedge funds.

 

Choose? What choice do "we" have? Free? I feel like I'm a little less "free" every time Congress passes another massive set of laws that suck the life out of my country.

 

and what if they do not register?

 

Politicians! The scourge of the earth!

I cannot see how history will look positively on the Obama administration.

 

Why would a non-US resident hedge fund with no US citizens as employees register with the SEC? What if they don't? I see the hedge fund business to be conducted by non-US citizens sitting in various offshore locations and happily accepting US customers, in the meantime giving the middle finger to SEC/IRS/other fascist organizations... LOL.

 

i live in the province of British Columbia, Canada. last year the province changed
the regulations so that brokers must have a physical office here in order to do
business with BC residents. at last count that meant i could do fx business with
3, 3, fx brokers. i had to close my account with FXCM; FXCM US and UK state
on their sites: "British Columbia residents are not eligible to apply with FXCM" -
applications from residents of any of the other Canadian provinces are eligible

NO UK or US fx broker will accept BC applications, i presume the same applies
with EU brokers, not sure about brokers in Cyprus for instance or 'Russian' based
brokers or fx brokers in 'Arab' countries or the Caribean

so it's a question too if 'asset managers' want to register, or will they simply tell
their US clients they must close their account

 

I suggest you study what happened to offshore gambling companies which accepted money from americans.

someone who uses the word fascist in a serious money matter is shooting from the hip with very little knowledge.