SEC nears registration deadline extension

The US Securities and Exchange Commission has scheduled a meeting for 22 June to consider extending the SEC registration deadline and to adopt final rules.

The US Securities and Exchange Commission is expected to formally extend the registration deadline for private fund managers from 21 July to early next year at a meeting set for 22 June, according to a Kirkland & Ellis client brief.

The US financial reform bill Dodd-Frank passed last year mandated that private equity firms, inlcuding private equity real estate firms, with $150 million or more of 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.

However, questions remain and final rules have yet to be issued, which prompted the SEC to announce in April that the agency was considering extending the registration deadline to the Q1 2012.

Robert Plaze, an associate director with the SEC, wrote in a letter posted on the SEC’s website in April that an extension was under consideration. “Given the time needed for advisors to register and come fully into compliance with the obligations applicable to them once they are registered, we expect that the commission will consider extending the date by which these advisors must register … until the first quarter of 2012,” Plaze wrote.

At the same meeting, the SEC will also consider adopting final rules regarding registration of private fund managers, exemptions from registration for venture capital funds and private equity or prvate equity real estate funds with less than $150 million in assets under management in the US and the exemption from registration for family offices.

Firms that straddle the line between venture capital and private equity still don’t know if they must register. Similarly, there is uncertainty around the $150 million AUM threshold in the US, including whether or not that amount will include uncalled commitments and how it will apply to non-US private equity firms. The registration proposal calls for uncalled commitments to be included in AUM, and many non-US advisors to be excluded from registration, but that has yet to be finalised.

The SEC is planning to clarify these final rules, wrote Kirkland & Ellis.