SEC backs rule change requiring PE fund adviser registration
The US Securities and Exchange Commission (SEC) yesterday approved legislation mandating registration for private equity and hedge fund advisers. Under a measure that features in the Dodd-Frank Act, advisers will have to disclose information on their investors and employees, the assets they manage, potential conflicts of interest, and their activities outside of fund advisory.
Advisers must register by March 30 and all of the information disclosed will be available to the public, Bloomberg reported.
However, the House Financial Services Committee yesterday approved legislation that would remove the registration requirement for private equity funds. This arose from several draft bills filed by Congressional Republicans earlier in the year.
About 750 advisers will be affected by the SEC's rule change. Many of the largest US hedge funds are already registered.
Exemptions are to be made for up to 2,000 venture capital fund advisers and foreign advisers with less than $150 million under management, although they will still have to file some information with the SEC. The SEC definition of venture capital applies to funds that invest predominantly in private companies, with minimal leverage, no redemption rights for investors and no more than 20% of capital in non-qualifying investments. Funds that started raising money before 2011 automatically qualify.
Separately, the SEC voted to exempt family offices from regulation. To qualify, offices must advise only family clients and be controlled by family members.
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