Tony Griffiths

29/06/2011 Author: Tony Griffiths

SEC extension takes the pressure off – for now 

Confirmation from the SEC this week that the deadline for hedge funds to register under the Dodd-Frank Act is to be extended came as little surprise. Mooted for months, this was one of the worst-kept secrets in recent memory.

Although officially to allow the SEC more time to increase its resources, the collective sigh of relief from the managerial community was audible. The new deadline, 30 March 2012, will give an industry already burdened with regulation overload some much needed respite. An increased threshold, up from $100m to $150m, will also help.   

Josh Dambacher, partner at Schulte, Roth & Zabel, was surprised by just how many managers on both sides of the Atlantic were taking this so seriously. The vast majority already have a “game plan”, he told HFMWeek. “Everyone generally seems to knows where they stand”.

Not everyone is prepared though. Kinetic Partners’ Andrew Shrimpton said this week that, in spite of the extension, “there is still a lot of work for fund managers to do in order to meet the deadline.” UK managers will have particularly onerous compliance obligations, he added, highlighting Amended Adviser forms, requiring disclosure of five categories of gatekeepers.

For Dambacher, the concern is also for non-US managers – those that are not used to the prescriptive rules of the SEC. “I’m more worried about whether non-US managers have compliance officers with the expertise and understanding of the SEC’s rules,” he said.   

Despite the extension, the regulatory inbox is bulging for all managers with US exposure. Compliance officers at non-US managers, however, may be sweating more than most.

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