The Hedge Fund Law Report

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By Topic: Conference Coverage

  • From Vol. 4 No.42 (Nov. 23, 2011)

    Speakers at Walkers Fundamentals Hedge Fund Seminar Provide Update on Hedge Fund Terms, Governance Issues and Regulatory Developments Impacting Offshore Hedge Funds

    On November 8, 2011, international law firm Walkers Global (Walkers) held its Walkers Fundamentals Hedge Fund Seminar in New York City.  Speakers at this event addressed various topics of current relevance to the hedge fund industry, including: recent trends in offshore hedge fund structures; hedge fund fees and fee negotiations; fund lock-ups; fund-level and investor-level gates; fund wind-down petitions and the appointment of fund liquidators; corporate governance issues; D&O insurance; fund manager concerns with Form PF; and offshore regulatory developments, such as proposed legislation requiring registration of certain master funds in the Cayman Islands, the EU’s Alternative Investment Fund Manager (AIFM) Directive and the British Virgin Islands (BVI) Securities & Investment Business Act (SIBA).  This article summarizes the key points discussed at the conference relating to each of the foregoing topics and others.

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  • From Vol. 4 No.33 (Sep. 22, 2011)

    Fifth Annual Hedge Fund General Counsel Summit Covers Insider Trading, Expert Networks, Whistleblowers, Exit Interviews, Due Diligence, Examinations, Pay to Play and More

    On September 13, 2011, ALM Events hosted its fifth annual Hedge Fund General Counsel Summit at the Harvard Club in New York City.  Participants at the event discussed how the changing regulatory landscape is impacting the day-to-day policies, procedures and practices of hedge fund managers.  Of particular note, discussions focused on insider trading in the post-Galleon world; best compliance practices for engaging and using expert network firms; how to motivate employees to report wrongdoing internally rather than filing whistleblower complaints; the interaction between non-disparagement clauses in hedge fund manager exit agreements and the whistleblower rule; best practices for exit interviews; best practices for responding to initial and ongoing due diligence inquiries; consistency across DDQs and other documents; standardization of DDQs versus customized answers; whether to disclose the existence or outcome of regulatory actions; how to deal with government investigations and examinations; and strategies for complying with the pay to play rule.  This article summarizes the most noteworthy points made at the event.

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  • From Vol. 3 No.34 (Aug. 27, 2010)

    Foundation for Accounting Education’s “2010 Hedge Funds and Alternative Investments” Conference Focuses on Taxation of Hedge Funds and Hedge Fund Managers, Structuring, Valuation, Risk Management, Due Diligence, Insurance and Regulatory Developments

    On July 29, 2010, the Foundation for Accounting Education (FAE) presented its 2010 Hedge Funds and Alternative Investments Conference in New York City.  Speakers at the one-day event focused on a range of issues impacting the hedge fund industry, including: FIN 48 (which relates to accounting for uncertain tax liabilities); ASU 2010-10 (which amends Statement of Financial Accounting Standards No. 167, which in turn requires nonpublic companies to publicly disclose their interests in variable interest entities in a similar manner to the disclosure provided by public entities); carried interest taxation developments; state and local tax developments relevant to hedge fund managers; tax implications of globalization of the hedge fund industry; special purpose vehicles; blockers; unrelated business taxable income and effectively connected income; mini-master funds; master-feeder and side-by-side structures; International Financial Reporting Standards; valuation trends; risk management; due diligence; insurance; and regulatory developments.  This article details the key points discussed during the conference.

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  • From Vol. 3 No.17 (Apr. 30, 2010)

    Hedge Fund Operations and Technology Conference Focuses on SEC Reviews, Outsourcing of Operations, Operational Due Diligence, Multiple Prime Broker Relationships and More

    On April 21, 2010, Financial Technologies Forum LLC hosted its Third Annual Hedge Fund Operations & Technology conference in New York City.  The backdrop for the conference was a hedge fund industry coming out of two years of turmoil and refocused on hedge fund organizational structures, risk profiles, counterparties, trade processes, compliance policies, valuation approaches, information technology infrastructure and manager backgrounds.  The underlying question that the conference sought to address was how hedge fund operations and technology are evolving in light of the lessons learned during the crisis.  This article focuses on the more noteworthy points discussed during the conference, including potential new regulation and registration requirements; compliance policies and strategies (including use of a compliance calendar); anticipated increases in the frequency and depth of SEC reviews of hedge funds (including specific areas on which the SEC is expected to focus); demands from investors for increased transparency; outsourcing of operational functions (including appropriate service levels and due diligence to be performed on service providers); the specific components of operational due diligence, especially as it relates to service providers; and the rationale for and management of multiple prime brokerage relationships.

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  • From Vol. 3 No.16 (Apr. 23, 2010)

    Impact of Regulatory Reforms on Hedge Funds is Key Focus of PLI’s Hedge Fund Registration and Compliance 2010 Seminar

    As the government and the Securities and Exchange Commission (SEC) push for a number of reforms in the financial markets, the impact on hedge funds is expected to be significant, particularly with the Private Fund Investment Advisers Registration Act of 2009 (House bill) and the Wall Street Reform and Consumer Protection Act of 2009 (Dodd bill) both calling for the mandatory registration of hedge fund managers who meet certain assets under management (AUM) thresholds.  On April 9, 2010, the Practising Law Institute hosted the Hedge Fund Registration and Compliance 2010 seminar in New York City.  Among the key topics discussed during the conference were: fund manager registration; likely changes to the definition of accredited investor; proposed resolution authority; the Volcker Rule; key issues regarding hedge fund marketing; side letters; strategy drift; and soft dollars.  This article offers a comprehensive summary of the key points raised and discussed at the conference.

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  • From Vol. 3 No.15 (Apr. 16, 2010)

    White & Case Hosts Program on “Financial Regulatory Reform: Current Status and Developments,” Highlighting Key Legislative Proposals Impacting Hedge Fund Managers, Broker-Dealers and Derivatives Industry Participants

    As previously reported in the Hedge Fund Law Report, on March 26, 2009, the U.S. Department of the Treasury outlined a new framework for financial regulatory reform, including a proposal to require advisers to hedge funds (and other private pools of capital) with assets under management above a certain threshold to register with the SEC, along with certain other regulatory reforms.  See “Treasury Calls for Registration of Hedge Fund Managers with Assets Under Management Above a Certain Threshold and Outlines Framework for Other Regulatory Reforms Aimed at Limiting Systemic Risk,” The Hedge Fund Law Report, Vol. 2, No. 13 (Apr. 2, 2009).  Some of these reforms have been incorporated into current and pending legislation, including, most notably, the Private Fund Investment Advisers Registration Act of 2009, which was incorporated into Title V of the Wall Street Reform and Consumer Protection Act of 2009 and was passed by the House of Representatives on December 11, 2009 (House bill), and the Restoring American Financial Stability Act of 2009, which was introduced by Banking Committee Chairman Senator Christopher Dodd on November 10, 2009 (Dodd bill).  For more on the Dodd bill, see “Does the IOSCO Hedge Fund Disclosure Template Foreshadow the Content of Hedge Fund and Hedge Fund Adviser Disclosures to be Required by the SEC?,” above, in this issue of the Hedge Fund Law Report.  Also on March 26, 2009, the Obama Administration issued details on proposed legislation for a “resolution authority” that would give the President sweeping powers to dismantle or reorganize failing companies that pose a threat to the country’s financial system.  On April 8, 2010, White & Case LLP held a seminar entitled “Financial Regulatory Reform: Current Status and Developments,” with the goal of outlining and analyzing some of the more significant pieces of the pending financial regulatory reform legislation referenced above, and the ways in which various market participants may be impacted by such reforms.  This article outlines the most relevant topics discussed at the seminar, including: legislation relating to creation of a “resolution authority” to deal with pending failures of large, interconnected financial companies; ipso facto clauses in derivatives contracts; proposed central clearing requirements for derivatives; comparisons of the relevant provisions of the House and Dodd bills with respect to hedge fund manager registration; the issue of self-custody by hedge fund managers in light of the recent amendments to the custody rule; the proposed fiduciary standard for broker-dealers providing investment advice incidental to their brokerage activities; and the treatment of proprietary trading activities of broker-dealers under the Volcker Rule.

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  • From Vol. 3 No.5 (Feb. 4, 2010)

    Institutional Investor Forum Focuses on Hedge Fund Manager Fiduciary Duty, SEC Subpoena Power, Hybrid Hedge Fund Structures, Managed Account Platforms, Codes of Ethics and More

    On January 27, 2010, the Practising Law Institute hosted the Institutional Investor Forum 2010 in New York City.  Among the key topics discussed during the conference were: fiduciary duty and the duties of good faith and fair dealing under Delaware law; exculpation and indemnification concerns in the context of Delaware limited partnerships and limited liability companies; various proposed and current federal and state regulations of hedge fund managers and placement agents; SEC staffing and budgeting; the SEC’s subpoena power when conducting examinations; hybrid fund structures and terms; managed accounts and managed account platforms; and what fraud prevention practices investors look for in hedge fund adviser Codes of Ethics.  This article offers a comprehensive summary of the key points raised and discussed at the conference.

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  • From Vol. 2 No.50 (Dec. 17, 2009)

    Speakers at Walkers Fundamentals Hedge Fund Seminar Outline Hedge Fund Due Diligence and Financing Trends, as well as Predictions for 2010 and Beyond

    On December 2, 2009, international law firm Walkers Global held its Walkers Fundamentals Hedge Fund Seminar in New York City.  Speakers at this event addressed various current issues, including: the evolving nature, rigor and focus of hedge fund due diligence; renewed scrutiny of custody arrangements in the course of due diligence; post-investment due diligence and monitoring; financing for hedge funds and due diligence with respect to collateral; the regulatory outlook (with insight from Todd Groome, Non-Executive Chairman of AIMA); the duty of care applicable to hedge fund directors; Cayman Islands law with respect to indemnification of directors; and the outlook with respect to near-term fund-raising and a potential new government levy on hedge fund managers.  This article summarizes the key points discussed at the conference on each of the foregoing topics.

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  • From Vol. 2 No.42 (Oct. 21, 2009)

    Hedge Fund Association Hosts Capitol Hill Symposium Focused on Hedge Fund Adviser Registration and Hedge Fund Industry Regulation

    On October 5, 2009, the Hedge Fund Association (HFA) held its third annual Capitol Hill Symposium in Washington, DC.  This year’s symposium addressed many of the regulatory proposals pending before Congress that would affect the global hedge fund industry.  Although there are numerous bills currently pending, the symposium focused on two recent proposals in the House of Representatives: (1) the Investor Protection Act, which would hold broker-dealers that provide investment advice to the same fiduciary duty standard as investment advisers; and (2) the Private Fund Adviser Registration Act, which would require most hedge fund managers to register with the Securities Exchange Commission as investment advisers.  See “U.S. House of Representatives Holds Hearing on Hedge Fund Adviser Registration,” above, in this issue of The Hedge Fund Law Report.  See also “House Subcommittee Considers Bill Requiring U.S. Hedge Fund Advisers with Over $30 Million in Assets Under Management to Register with SEC,” The Hedge Fund Law Report, Vol. 2, No. 41 (Oct. 15, 2009).  Rep. Paul Kanjorski (D-Penn.), the sponsor of the bills, spoke at the symposium, offering his thoughts on the need for and timing of the legislation.  We discuss the more noteworthy ideas raised at the symposium, including: The Hedge Fund Association’s position on hedge fund regulation and the rationale for its position; Rep. Kanjorski’s keynote address; credit ratings reform; international coordination of regulatory efforts; industry reactions to the Investor Protection Act and Private Fund Adviser Registration Act; and the practical risks inherent in increased regulation of the hedge fund industry.

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  • From Vol. 2 No.41 (Oct. 15, 2009)

    Participants at Third Annual Hedge Fund General Counsel Summit Discuss Adviser Registration, Side Letters, SEC Audits and Enforcement, Fund Restructurings and More

    On October 1, 2009, the Third Annual Hedge Fund General Counsel Summit convened in Old Greenwich, Connecticut, organized by Corporate Counsel and Incisive Media Events.  The one-day conference featured eight panel discussions focusing on topics including the following: changes in the regulatory and enforcement practices of the Securities and Exchange Commission (SEC); the “foregone conclusion” that the U.S. Congress will soon pass a bill requiring the registration of certain hedge fund advisers; how to prepare for an SEC audit; side letter terms and tracking; and hedge fund restructurings in the U.S., Cayman Islands and British Virgin Islands.  A recurring theme among the various panels was the newfound relevance of compliance and robust controls in the hedge fund business, and the concomitant growth in importance within hedge fund managers of the general counsel and chief compliance office (often the same person).  This article discusses the most salient points raised at the conference.

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  • From Vol. 2 No.38 (Sep. 24, 2009)

    Holtz Rubenstein Reminick Hosts Conference on “Uncovering Foreign Income: The Implications and Consequences of Foreign Bank Account Reporting”

    On September 16, 2009, the accounting firm Holtz Rubenstein Reminick (HRR) hosted a seminar on reporting of foreign bank accounts, for both income tax and anti-money laundering purposes.  Reporting on foreign income has become headline news of late.  Notably, in February 2009, UBS, the largest Swiss bank by assets, reached a settlement with the U.S. Internal Revenue Service (IRS) in which UBS agreed to give the IRS hundreds of names of Americans suspected of using UBS accounts to evade U.S. income taxes.  Several UBS clients have been prosecuted. The HRR seminar was chiefly designed to address the issue of whether people who have accounts with UBS or other foreign banks should make voluntary disclosure to the IRS of the existence of such accounts and other data with respect to such accounts.  Panelists also briefly discussed the still-undecided issue of whether an interest in an offshore hedge fund must, under the Bank Secrecy Act, be reported in a Report of Foreign Bank and Financial Accounts (FBAR).  See “IRS Indicates that U.S. Persons May be Required to Report Interests in Offshore Hedge Funds in Reports of Foreign Bank and Financial Accounts,” The Hedge Fund Law Report, Vol. 2, No. 26 (Jul. 2, 2009).  We detail the relevant points from the conference.

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  • From Vol. 2 No.31 (Aug. 5, 2009)

    Changing Hedge Fund Landscape Key Focus of Foundation for Accounting Education’s 2009 Hedge Funds and Alternative Investments Conference

    On July 29, 2009, the Foundation for Accounting Education presented the 2009 Hedge Funds and Alternative Investments Conference in New York City.  During the one-day event, industry participants discussed the changing landscape for hedge funds, including new demands from investors and the most recent regulatory developments.  A key theme echoed by the participants was that hedge funds need to be better prepared to deal with the changes that are coming, from registration to new valuation policies to increased examinations, not only by the Securities and Exchange Commission (SEC) but by the Internal Revenue Service (IRS) as well.  We detail the key take-aways from the conference, including a discussion of the erosion of trust among hedge fund managers and investors; pressure on hedge fund fees; likely changes in hedge fund regulation; expanded SEC examinations of hedge fund managers and improvements to the training of the SEC’s hedge fund examination staff; and the new IRS Managed Funds Group.

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  • From Vol. 2 No.24 (Jun. 17, 2009)

    Regulatory Compliance Association Hosts Teleconference on “A New Era in Valuation”; Speakers Address Trans-Atlantic Convergence of Fair Value Accounting Principles, Indemnification of Hedge Fund Administrators and Due Diligence

    On June 10, 2009, The Regulatory Compliance Association (RCA) hosted a teleconference titled “A New Era in Valuation,” as part of its CCO University Outreach Series.  The speakers discussed international accounting standards and the price and valuation committees charged with implementing them; the roles, responsibilities and indemnification of service providers, in particular administrators; and how due diligence has and will continue to evolve in a “new era” characterized, as RCA Chairman Walter Zebrowski said, by the convergence of “market losses, declining fund values and rising liabilities.”  In this new era, Zebrowski noted, the International Accounting Standards Board and its U.S. counterpart, the Financial Accounting Standards Board, will continue to work toward more effective accounting principles, but in the glare of a political spotlight that was turned on by Enron and brightened by the off-balance-sheet accounting for various of the vehicles at the heart of the current credit crisis.  See generally “Key Lessons from the Second Annual Hedge Fund Tax, Accounting & Administration Master Class: IFRS, Fair Value and SEC Examinations,” The Hedge Fund Law Report, Vol. 2, No. 21 (May 27, 2009).  We summarize the key topics of discussion from the RCA teleconference.

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  • From Vol. 2 No.21 (May 27, 2009)

    Key Lessons from the Second Annual Hedge Fund Tax, Accounting & Administration Master Class: IFRS, Fair Value and SEC Examinations

    From May 18th through May 20th, 2009, Financial Research Associates LLC and The Hedge Fund Business Operations Association presented the Second Annual Hedge Fund Tax, Accounting & Administration Master Class in New York City.  During the three-day conference, leading industry participants discussed the latest developments in hedge fund taxation, regulation, accounting and administration.  A key theme among the participants was that valuation will receive greater regulatory focus going forward, and hedge fund managers will need to keep up to date on relevant changes in accounting standards in order to prevent (or survive) investigations from the SEC and other regulators.  We summarize some of the key take-aways from the conference, and we include a lengthy discussion of how to approach and survive an SEC examination based on comments at the conference from Thomas Biolsi, Associate Regional Director of the SEC, and Thomas Verderber, Staff Accountant at the SEC.

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  • From Vol. 2 No.14 (Apr. 9, 2009)

    Kaye Scholer Seminar Covers Hedge Fund Structures, Distressed Strategies, the Public-Private Investment Program, Pros and Cons of Prepackaged Bankruptcies and Bankruptcy Code Section 363 Sales

    On April 2, 2009, global law firm Kaye Scholer LLP hosted a seminar at its Manhattan office titled “Using Private Equity and Hedge Fund Structures and Strategies to Invest in Distressed Assets.”  The seminar consisted of the following sections: (1) An overview of the core structures and concepts of hedge funds and private equity funds, presented by Timothy A. Spangler, a London-based Kaye Scholer Partner who chairs the firm’s Investment Funds Group; (2) A discussion of laws and accounting principles bearing on the sales and purchases of distressed financial assets, led by Henry Morriello, a New York-based Kaye Scholer Partner, Co-Chair of the firm’s Structured Finance Group and Head of the its Transportation Asset Finance Group, which included an overview of the new Public-Private Investment Program; and (3) A review of bankruptcy laws relevant to hedge fund investments, and of when potential purchasers of distressed assets are better off working through the bankruptcy process rather than around it, delivered by G. Thomas Stromberg, a Kaye Scholer Partner in the firm’s Los Angeles office.  We detail the salient points raised and discussed at the seminar.

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  • From Vol. 2 No.11 (Mar. 18, 2009)

    “Hedge Funds – The Regulatory Wagons are Circling,” a Webinar Hosted by SEI Knowledge Partnership

    On February 12, 2009, SEI Knowledge Partnership hosted a webinar titled “Hedge Funds – The Regulatory Wagons are Circling,” in which panelists discussed recent proposed legislation relating to hedge funds and their managers, and the potential impact of those proposals on the hedge fund industry.  We detail the relevant insights from that conference, and in the process review various of the bills currently pending in Congress to regulate hedge funds and their managers.

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  • From Vol. 2 No.9 (Mar. 4, 2009)

    Regulatory Compliance Association Hosts Teleconference on “Hedge Funds in the Cross-Hairs of Regulatory Reform”; Speakers Address Potential New Regulation and Its Likely Impact, Enforcement and Best Practices

    On February 25, 2009, The Regulatory Compliance Association (RCA) hosted a teleconference titled “Hedge Funds in the Cross-Hairs of Regulatory Reform,” as part of its CCO University Outreach Series.  The teleconference focused on four general themes: the near certainty of passage of new legislation focused on hedge funds; the widening scope of civil and even criminal cases brought against hedge fund industry participants by prosecutors and administrative agencies; the potential systemic effects of likely regulatory changes; and the importance of instituting best practices before being required to do so by the government.  We provide a detailed summary of the salient points covered in the teleconference.

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  • From Vol. 2 No.6 (Feb. 12, 2009)

    Ropes & Gray Hosts Teleconference on SEC Enforcement Actions Against Investment Managers, Potential Regulatory Changes in Response to Madoff and Private Plaintiff Claims Against Investment Managers

    On February 4, 2009, global law firm Ropes & Gray LLP hosted a teleconference titled “The Sinking Markets’ Effect on Investment Funds: Litigation and Enforcement Issues Every Investment Fund Executive Should Know.”  The teleconference consisted of four presentations, each by one Ropes partner addressing an overarching question.  Those questions were as follows: (1) Under what theories is the SEC likely to bring claims against unsuccessful and “imprudent” managers?; (2) What impact is the alleged Madoff Ponzi scheme likely to have on future enforcement actions?; (3) What lessons may be learned from the problems at the Reserve Fund, a money-market mutual fund whose value tumbled and “broke the buck,” because of its over-reliance upon commercial paper issued by a Lehman Brothers entity?; and (4) More generally, what is the scope of private liability risk facing funds that have suffered substantial losses, and their managers?  We relate the material points from the various Ropes partners’ answers to these questions.

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