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Financial Reform Bill: Snapshot of 

Impact on Hedge Funds, Private Equity

July 2010

This presentation is for general information purposes

only and does not constitute Eze Castle Integration legal

or investment advice as to any particular set of facts.

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Situation SnapshotSituation Snapshot

July 16, 2010: Senate approves ConferenceReport to Dodd-Frank Wall Street Reform andConsumer Protection Act  ± Hedge fund and private equity regulation and registration coming

President Obama to sign into law ± Expected week of July 19, 2010

Download the Conference Report 

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Whats included in the Reform BillWhats included in the Reform Bill

1. Registration: Hedge funds and private equity firms with>$150 million in AUM must register with the SEC

 ± Less than $150 million? Youre exempt.

2. Greater State Supervision: Threshold for federalregulation of investment advisers is being raised from$30 million to $100 million

 ± Allowing for greater state supervision of advisers

3. Private Adviser exemption in Investment Advisers Act of 1940 eliminated, thus registering advisers toprivate funds with the SEC.

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Whats included in the Reform BillWhats included in the Reform Bill

4.  Accredited Investor redefined:

 ± $1 million net worth, excluding value of primary residence

 ± Charging performance fee? Investor generally needs $1.5 millionnet worth with primary residence included

5. Increased Reporting: SEC has power to requireadvisers give info on trades and portfolios as necessaryto assess systemic risk 

 ± SEC can require advisers to disclose identity or investments of their clients for purposes of systemic risk 

 ± SEC will report annually to Congress on uses of data to protect investors and market integrity

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Whats included in the Reform BillWhats included in the Reform Bill

6. Whistle-blowing: An incentive up to 30% of fundsrecovered for information provided has been put inplace to encourage whistle-blowing.

7. Timeline: Advisers must comply with the newprovisions within one year of enactment of theconference report 

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How to Prepare? Technology AspectsHow to Prepare? Technology Aspects

Data Protection ± Presidents Working Group says hedge funds should have

Business Continuity and Disaster Recovery plans

 ± Solutions: Eze Disaster Recovery & Eze Business Continuity

Planning

Data Archiving ± SEC advises firms retain all internal and external email and IM

communications ± Solution: Eze Archiving

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