have you been dodd-frank'ed?

Have you been Dodd-Frank’ed?

Do You Need to Register as an Investment Adviser?

Compliance Program

• Chief Compliance Officer• Code of Ethics• Intense Record-Keeping• Insider Trading Policy• Political Contribution Controls

What Do You Need?

• Proxy Voting• Best Execution• Custody of Securities• Soft Dollar

What Do You Need? (less relevant)

What Else Should You Have

• Investment Allocation• Valuation Policy• Affiliate transaction controls

Assess compliance risks, and identify where the fund’s best interest is not aligned with the best interest of the fund manager

Risk-Based Policies

Insider Trading

• Annual Holdings Report• Quarterly Transactions Report• Pre-clear IPO• Pre-clear Private Placements• Pre-clear all trades?• Access persons

Insider Trading – Access Person

• Anyone with access to non-public information regarding the fund’s purchase or sale of securities

• Anyone involved in making securities recommendations

• Directors• Officers• Partners

Need to be in compliance when you file the Form ADV

Need to Register by July 21, 2011

(that means file at 45 days prior to then)

Running Start

Rule 206(4)-7:

Review, no less frequently than annually, the adequacy of the policies and procedures established pursuant to this section and the effectiveness of their implementation

It’s Never Over

Custody Rule

Accredited Investor

Pay-to-Play

SEC Rule 206(4)-5

1. Limits the use of third party placement agents

2. Limits campaign contributions

Bans the use of third party placement agents, unless they are• Registered investment advisersor•Registered broker dealers (If FINRA enacts a similar rule)

SEC Rule 206(4)-5

Prohibits collecting fees from a government client for two years, if:• A covered associate • Makes a political contribution• To a government official or candidate• For an office that can influence, directly or indirectly,

the decision to hire the investment adviser

SEC Rule 206(4)-5

• Registered• Unregistered and relying on exemption (dated)• Treats government investor as direct instead of

through the fund

Application to Fund Managers

Candidate for an elective office :• that can directly or indirectly influence the hiring of

an investment adviser,

or• has the authority to appoint a person who can

directly or indirectly influence the hiring of an investment adviser

Political Officials

Two year “time out” on receiving advisory compensation is NOT triggered for contributions:• For a candidate you can vote for: $350• For a candidate you can’t vote for: $150

In the aggregate per election - Primary and general election are separate

De Minimis Exception

• General partner or managing member• Employees who solicits a government entity for the

investment adviser and any person who supervises, directly or indirectly, such employee

• “Executive officers”

Covered Associate

• President• Any vice president in charge of a principal business

unit, division or function• Any other officer who performs a policy-making

function• Any other person who performs similar policy-

making functions

Covered Associate -Executive Officer

Policy

• Who to include as a “covered associate”• Reporting of all political contributions• Pre-clearance of political contributions• Pre-clear new hires• March 2011 Compliance Deadline

Policy Considerations

John SchneiderKPMG [email protected]

Paul SchwartzGoodwin Procter [email protected]

Doug CorneliusBeacon Capital Partners, [email protected]://www.ComplianceBuilding.com

Contact Information

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Contact Information

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