Financial Regulation Review Sheet

Topics: Mutual fund, Financial services, Hedge fund Pages: 4 (779 words) Published: February 7, 2014
Monday December 16 2:35 Final

SEC Regulation Steps

1933 Act- offering of securities
-private placement exemption- if it’s not made to public in advertised way
-accreddited investors
1940 Act- Issuer that is a fund, fund must register if it’s an investment company (over 40% of assets in securities
-qualified purchaser- high net worth individuals
-fewer than 100 investors
Advisors Act- if the issuer is a fund, investment company, advisor must register
-foreign advisors exemption
-less than $150 million in assets exemption
-fewer than 15 clients exemption taken away by Dodd-Frank Title IV 1934 Act- any person that sells securities for an individual must register as a BD
-issuers exemption- family and friends

Registered investment companies must:
-have independent board of directors
-use vote of shareholders on key subjects
-restrictions on transactions with affiliates
-leverage limits
-no short selling

Private Funds- Hedge funds, Collateralized Loan Oblications, Collateralized Debt Obligations, patent/intellectual property funds, venture capital funds

Volcker Rule- short term trading account for prop. Trading qualification
-Covered transactions prohibited even (federal reserve act 23a)
Part 1 exemptions- bank and BHC cannot prop trade except
-hedging- purchased to hedge position of investor against risk
-activity outside of U.S. by foreign bank (SOTUS)
-shares are bought on the account of a customer
-underwriting or market making
-prop. Trading in U.S. government securities
Part 2- prohibits any “banking entity” from making certain investments in, and maintaining certain relationships with, a “hedge fund or private equity fund.”
-solely outside U.S.
-securitization of loans, may sponsor and invest in securitization
-if bank sponsors fund they may invest in up to 3% of the security

Ring Fencing-
Volcker Rule, remove prop. Trading from BHC family

Dodd Frank Act
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