SEC extends registration deadline

The US Securities and Exchange Commission adopted final rules surrounding required registration with the agency. Private fund managers must comply by 30 March 2012.

The US Securities and Exchange Commission has formally extended the registration deadline for private fund managers from 21 July to 30 March 2012.

Dodd-Frank, the US financial reform bill passed last year, mandated that private equity firms with $150 million or more in assets under management in the US register with the SEC. Registration will give the US government more oversight over managers, including the right to run inspections and forces firms to hire or designate a compliance officer.

The SEC announced on 22 June that an extension has been granted as rules are just now being finalised. Firms that straddle the line between venture capital and private equity still didn’t know if they must register.

However, at the 22 June meeting, the SEC addressed registration exemptions for venture capital funds and private equity funds with less than $150 million in assets under management in the US.

To qualify for an exemption, the SEC ruled that:
• The fund can pursue qualifying investments, with an exemption for 20 percent of the venture capital fund’s capital commitments
• The fund must represent itself as a venture capital fund
• The fund cannot leverage itself with more than 15 percent of its capital
• The fund cannot offer investors short-term liquidity except in certain circumstances

Managers have until 30 March to comply – an extended deadline that gives them more time to designate a chief compliance officer, implement a compliance programme and file all necessary forms with the SEC.