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Chapter 1: |
The Registered Offering |
Richard H Rowe ~ Proskauer Rose LLP |
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- § 1:1 : The Registered Offering1-2
- § 1:2 : Why Go Public?1-4
- § 1:2.1 : To Raise Capital1-4
- § 1:2.2 : To Effect Venture Capital Exit Strategies1-4
- § 1:2.3 : To Satisfy Founders’ Desires1-4
- § 1:2.4 : To Address Employee Considerations1-5
- § 1:3 : Why Not Go Public?1-5
- § 1:3.1 : Loss of Complete Control1-5
- § 1:3.2 : Disclosure Requirements1-5
- § 1:3.3 : Liability Exposure1-6
- § 1:3.4 : The Impact of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 20101-6
- § 1:4 : Pre-IPO Planning1-7
- § 1:4.1 : Corporate Cleanup1-7
- § 1:4.2 : Planning for the Offering1-8
- [A] : Disseminating Information1-10
- § 1:5 : Possible Show Stoppers1-12
- § 1:5.1 : “Integration,” “Gun Jumping,” and Eligibility1-12
- § 1:5.2 : Accounting and Auditing Issues1-14
- § 1:6 : Preparation of the Registration Statement1-14
- § 1:6.1 : Sources of Informational Requirements1-15
- § 1:6.2 : Sanctioned Omission of Information1-15
- § 1:6.3 : Projections and Other Forward-Looking Information1-16
- § 1:6.4 : Consents of Experts1-17
- § 1:6.5 : Smaller Companies1-17
- § 1:6.6 : Commonly Used Registration Forms for IPOs and Offerings by Public Companies1-18
- § 1:7 : SEC Review Procedures1-18
- § 1:7.1 : Review of Registration Statement1-18
- § 1:7.2 : Review of Trust Indenture1-20
- § 1:8 : Underwriting Arrangements1-20
- § 1:8.1 : Term Sheets1-21
- § 1:8.2 : Letters of Intent1-21
- § 1:8.3 : Underwriting Agreements1-22
- § 1:9 : Financial Industry Regulatory Authority Review1-22
- § 1:10 : Blue Sky Matters1-23
- § 1:11 : Securities Markets Listings1-23
- § 1:11.1 : Stock Exchange Listing1-23
- § 1:11.2 : Other Markets1-24
- § 1:11.3 : Pitfalls1-24
- § 1:12 : Due Diligence1-24
- § 1:12.1 : The Statutory Basis for “Due Diligence”1-25
- § 1:12.2 : Securities Act § 12(a)(2)1-26
- § 1:12.3 : Securities Act § 151-26
- § 1:12.4 : Rule 10b-5—Negation of “Scienter” Based on Recklessness1-26
- § 1:13 : Due Diligence Procedures1-26
- § 1:13.1 : Checklists1-27
- § 1:13.2 : Corporate Structure1-27
- § 1:13.3 : Financial and Accounting Matters1-27
- § 1:13.4 : Tax1-29
- § 1:13.5 : Contracts1-30
- § 1:13.6 : Insurance1-30
- § 1:13.7 : Employees, Employee Arrangements, and Plans1-31
- § 1:13.8 : Legal Review1-31
- § 1:13.9 : Management1-33
- § 1:13.10 : Litigation and Regulatory Proceedings1-34
- § 1:13.11 : Business Risks1-34
- § 1:13.12 : Disclosure Issues1-35
- § 1:13.13 : Fact Certificates As the Basis for Due Diligence1-35
- § 1:13.14 : Memorialization of Due Diligence1-36
- § 1:13.15 : Timing; Updating1-36
- § 1:13.16 : Ethical, Confidentiality and Privilege Issues1-36
- § 1:13.17 : Liability Exposure of the “Due Diligencer”1-37
- § 1:14 : Post-Effective Matters1-38
- § 1:14.1 : Securities Exchange Act Requirements1-39
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Chapter 2: |
Limited Offerings and Private Placements; And Appendix 2A: Limited Offering and Private Placement Quick Reference Chart |
Harry Pangas ~ Sutherland LLP |
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- § 2:1 : Overview2-2
- § 2:2 : Securities Act of 1933 and State Blue Sky Laws2-2
- § 2:3 : Securities Act Exemptions for Limited Offerings and Private Placements2-4
- § 2:3.1 : Section 3(b) of the Securities Act—Limited Offerings2-4
- § 2:3.2 : Section 4(a)(2) of the Securities Act—Private Placements2-4
- § 2:4 : Regulation A in Detail2-7
- § 2:5 : Regulation E in Detail2-8
- § 2:6 : Regulation D in Detail2-9
- § 2:6.1 : Rule 504 Offerings2-9
- § 2:6.2 : Rule 505 Offerings2-10
- § 2:6.3 : Rule 506 Offerings2-11
- § 2:6.4 : No General Advertising or Solicitation2-12
- § 2:6.5 : Counting Investors2-14
- § 2:6.6 : Accredited Investors2-15
- § 2:6.7 : Disclosure Obligations2-18
- § 2:6.8 : Form D2-19
- § 2:6.9 : Recent Amendments to Form D2-20
- § 2:6.10 : Substantial Compliance2-21
- § 2:6.11 : Limitations on Resale2-21
- § 2:6.12 : Integration2-22
- § 2:6.13 : Integration of Private Placements and the Regulation D Safe Harbor2-22
- § 2:6.14 : Integration of Private Placement and Subsequent Public Offering—“Gun Jumping”2-23
- § 2:6.15 : Securities Offerings Available Under Regulation D2-25
- § 2:7 : Required and Proposed Revisions to Regulation D2-25
- § 2:8 : Interaction of Regulation S with Regulation D2-28
- § 2:9 : Rule 144A Transactions2-29
- § 2:10 : Future JOBS Act Exempt Offerings2-31
- § 2:11 : State Blue Sky Requirements2-35
- Appendix 2A : Limited Offering and Private Placement Quick Reference ChartApp. 2A-1
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Chapter 3: |
International Securities Offerings; And Appendix 3A: Form F-1: Registration Statement Under the Securities Act of 1933 |
Walter G Van Dorn ~ Sonnenschein Nath & Rosenthal |
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- § 3:1 : Public Offerings in the United States3-2
- § 3:1.1 : Registration on Form F-13-2
- § 3:1.2 : Short-Form and Shelf Registration3-6
- § 3:1.3 : Accounting and Financial Disclosure3-7
- § 3:1.4 : Trust Indentures3-10
- § 3:1.5 : Procedures and Mechanics3-11
- [A] : “Due Diligence” Investigations3-12
- [B] : Underwriting3-13
- § 3:2 : Global Offerings3-13
- § 3:2.1 : Combined Regulation S and Rule 144A Offerings3-14
- § 3:2.2 : Rule 144A3-14
- § 3:2.3 : Regulation S3-15
- [A] : Most Offerings by Non-U.S. Issuers; Some U.S. Issuers (Category 1)3-17
- [B] : Debt Offerings by Reporting U.S. and Non-U.S. Issuers and Non-Reporting Non-U.S. Issuers with SUSMI; Equity Offerings by Reporting Non-U.S. Issuers with SUSMI (Category 2)3-18
- [C] : All Other Offerings (Category 3)3-19
- [D] : Resales of Securities Under Regulation S3-20
- § 3:2.4 : Procedures and Mechanics3-21
- [A] : Equity Securities3-24
- [B] : Debt Securities3-25
- § 3:3 : American Depositary Receipts (or ADRs)3-25
- § 3:4 : State “Blue Sky” Laws3-27
- § 3:5 : Investment Company Act Considerations3-28
- § 3:6 : Legal Consequences to a Non-U.S. Company of Having a Public U.S. Market3-28
- § 3:6.1 : The Securities Exchange Act of 19343-28
- § 3:6.2 : Registration and Annual Reports3-29
- § 3:6.3 : Periodic Reports on Form 6-K3-32
- § 3:6.4 : Rule 12g3-2(b) Exemption3-33
- § 3:6.5 : Exemptions from the Exchange Act3-34
- § 3:6.6 : Exemption from Regulation FD3-34
- § 3:7 : Sarbanes-Oxley Act3-34
- § 3:7.1 : Internal Control over Financial Reporting3-35
- § 3:7.2 : Disclosure Controls and Procedures3-36
- § 3:7.3 : Certification Requirements3-36
- § 3:7.4 : Regulation G and Non-GAAP Financial Measures3-37
- § 3:7.5 : Audit Committees3-38
- § 3:7.6 : Audit Committee Financial Expert3-39
- § 3:7.7 : Auditor Independence3-39
- § 3:7.8 : Loans to Executives3-40
- § 3:7.9 : Trading During Pension Fund Blackout Periods3-40
- § 3:7.10 : Code of Ethics3-41
- § 3:7.11 : Off-Balance Sheet and Other MD&A Disclosure3-41
- § 3:8 : Listing on a U.S. Stock Exchange3-42
- § 3:9 : Foreign Private Issuer Deregistration3-43
- Appendix 3A : Form F-1: Registration Statement Under the Securities Act of 1933App. 3A-1
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Chapter 4: |
Securitization (Asset-Backed Securities and Structured Financing) |
Tamar Frankel ~ Boston University School of Law |
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- § 4:1 : Introduction4-2
- § 4:1.1 : The Current Crisis Involving Mortgage-Backed Securities4-4
- § 4:2 : Pooling4-6
- § 4:3 : Highlights of Securitization4-8
- § 4:3.1 : Securitization As a Converter; from Illiquid Loans to Liquid Securities; from Institutions to Markets; from Traditional Systems to a New System4-8
- [A] : Main Feature of Securitization4-8
- [B] : Conditions for the Development of Markets4-9
- [C] : Two Traditional Channels of Intermediation4-9
- [D] : Securitization As a Tool for Liquidity4-11
- [E] : Securitization As a New System of Intermediation4-11
- § 4:3.2 : Securitization As a Method of Selling Loans4-11
- § 4:3.3 : Securitization As a Mechanism for Unbundling Functions4-12
- [A] : Separating Lending from Other Functions4-12
- [B] : Separating the Servicing Function4-14
- § 4:3.4 : Securitization As a Tool for Flexible Creation of Securities4-14
- [A] : Flexibility in Allocating Risk Among Various Classes of Securities4-15
- [B] : Flexibility in Designing the Risk Level of SPV Securities: Diversification and Credit Enhancement4-17
- § 4:4 : Legal Issues Concerning Securitization4-18
- § 4:4.1 : Interdisciplinary Aspect of Securitization Law4-18
- § 4:4.2 : Legal Problems and Guides to Solutions4-19
- § 4:5 : Where Is Securitization Heading?4-22
- § 4:5.1 : The Reach of Securitization Today4-22
- § 4:5.2 : Can All Loans Be Securitized?4-24
- § 4:5.3 : Is Securitization Here to Stay?4-28
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Chapter 5: |
Introduction to Collective Investment Vehicles |
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- § 5:1 : Background5-1
- § 5:2 : Regulatory Structure5-2
- § 5:2.1 : The Retail Marketplace5-3
- § 5:2.2 : The Private Marketplace5-5
- § 5:2.3 : The Offshore Marketplace5-5
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Chapter 6: |
An Introduction to Mutual Funds |
Bibb L. Strench ~ Seward & Kissel LLP |
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- § 6:1 : A Brief History of the Mutual Fund Industry6-2
- § 6:2 : The Players6-10
- § 6:2.1 : Mutual Funds6-10
- § 6:2.2 : Investment Adviser6-11
- § 6:2.3 : Board of Directors6-12
- § 6:2.4 : Administrator6-13
- § 6:2.5 : Underwriter or Distributor6-13
- § 6:2.6 : Custodian6-13
- § 6:2.7 : Transfer Agent6-13
- § 6:2.8 : Independent Auditors6-13
- § 6:2.9 : Legal Counsel6-14
- § 6:2.10 : Chief Compliance Officer6-14
- § 6:2.11 : Shareholders6-14
- § 6:3 : Organizational Structure6-14
- § 6:3.1 : The Mutual Fund Complex6-14
- § 6:3.2 : The Adviser and the Board6-15
- § 6:3.3 : The Fund’s Distribution Structure6-16
- § 6:3.4 : Portfolio Management Structure6-17
- § 6:3.5 : Marketing Structures6-18
- § 6:4 : Regulatory Framework6-20
- § 6:4.1 : Overview of the Investment Company Act6-20
- § 6:4.2 : Restrictions on Advisory Services6-21
- [A] : Prospectus Disclosure6-21
- [B] : Controls Over the Advisory Contract6-22
- [C] : Corporate Structure6-22
- [D] : Private Right of Action6-23
- [E] : Affiliated Transactions6-23
- [F] : Restrictions on Investments6-24
- § 6:4.3 : Restrictions on Capital Structure6-25
- [A] : Prohibition on Debt Issuance6-25
- [B] : Issuance of Redeemable Shares6-25
- [C] : Pricing of Shares6-25
- § 6:4.4 : Restrictions on Sales of Fund Shares6-26
- [A] : Limits on Sales Load6-26
- [B] : Financing Distribution Through Fund Assets6-26
- [C] : Advertising Regulations6-26
- § 6:4.5 : Administration of the Investment Company Act: The Role of the SEC6-28
- [A] : SEC Inspections6-28
- [B] : Enforcement6-29
- § 6:5 : Application of the Investment Advisers Act6-29
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Chapter 7: |
Closed-End Investment Companies; And Appendix 7A: Form N-2: Registration Statement for Closed-End Management Investment Companies |
Wendell M. Faria ~ Paul, Hastings, Janofsky & Walker LLP |
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- § 7:1 : Introduction7-2
- § 7:2 : What Is a Closed-End Investment Company?7-3
- § 7:3 : Reasons for Relative Unpopularity of Closed-End Companies7-7
- § 7:3.1 : High-Cost Exit Strategies for Investors7-7
- § 7:3.2 : The Discount Phenomenon7-8
- § 7:4 : Reasons for Choosing to Operate As a Closed-End Company7-11
- § 7:5 : Regulation of the Offer and Sale of Closed-End Company Shares7-13
- § 7:6 : Financing Distribution Costs of Closed-End Companies7-16
- § 7:7 : Registration Procedures for Closed-End Companies7-17
- § 7:8 : Periodic Reporting Under the Investment Company Act7-17
- § 7:9 : Regulation of Share Repurchases by Closed-End Companies7-18
- § 7:9.1 : Requirements of the Exchange Act7-18
- § 7:9.2 : Repurchases in the Course of a Distribution: Rule 102 of Regulation M7-19
- § 7:9.3 : Requirements of the Investment Company Act7-20
- [A] : Rule 23c-17-20
- [B] : Rule 23c-27-21
- [C] : Rule 23c-37-21
- § 7:10 : Regulation of the Operations of the Closed-End Company7-24
- § 7:10.1 : The Capital Structure of Closed-End Companies7-24
- § 7:10.2 : Restrictions on Investments by Closed-End Companies7-26
- Appendix 7A : Form N-2: Registration Statement for Closed-End Management Investment CompaniesApp. 7A-1
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Chapter 8: |
Unit Investment Trusts; And Appendix 8A: Differences Between UITs and Mutual Funds |
Laurin Blumenthal Kleiman ~ Sidley Austin LLP
Joyce Larson ~ Sidley Austin LLP |
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- § 8:1 : Introduction8-2
- § 8:2 : History8-6
- § 8:3 : How UITS Compare to Mutual Funds8-8
- § 8:4 : UIT Structure8-9
- § 8:4.1 : Trust Indenture8-9
- § 8:4.2 : Key Participants8-10
- [A] : The Sponsor8-10
- [B] : The Trustee8-11
- [C] : The Evaluator8-12
- [D] : The Underwriters8-12
- § 8:5 : Creation, Offering and Sale of Units8-12
- § 8:5.1 : Trust Documents8-12
- § 8:5.2 : Accumulation and Deposit8-13
- § 8:5.3 : Offering and Sale of Units8-13
- [A] : Front-End Sales Charges8-13
- [B] : Deferred Sales Charges8-14
- § 8:5.4 : Liquidity of Units8-15
- § 8:6 : Registration Process8-16
- § 8:6.1 : Registration Under the Securities Act and the Investment Company Act8-16
- § 8:6.2 : Calculation of Filing Fees8-17
- § 8:6.3 : Disclosure Forms8-18
- [A] : Form N-8B-28-18
- [B] : Form S-68-19
- [C] : Form N-4 and Form N-68-19
- [D] : Proposed Form N-78-20
- [E] : Reports to the SEC and to Unitholders8-21
- § 8:7 : Selected Regulatory and Disclosure Issues8-22
- § 8:7.1 : Advertising8-22
- § 8:7.2 : Codes of Ethics8-22
- § 8:7.3 : Compliance Programs and Compliance Officers8-23
- § 8:7.4 : Point of Sale and Confirmation Disclosure8-23
- § 8:7.5 : Anti-Money Laundering Legislation8-23
- § 8:7.6 : Impact on UITs of the Sarbanes-Oxley Act of 20028-25
- [A] : Improper Influence on Conduct of Audits8-25
- [B] : Section 302 Certification Requirements8-25
- [C] : Other Provisions Not Applicable to UITs8-26
- [D] : Listing Standards8-26
- § 8:7.7 : Disclosure Issues8-26
- [A] : Return Information8-26
- [B] : Fees8-28
- [C] : Plain English Requirement8-28
- [D] : Disclosure Document Delivery8-28
- [E] : Investment Company Names8-29
- § 8:8 : The Evolving Definition of “Fixed Portfolio of Securities”8-29
- § 8:9 : Innovative Uses of the UIT8-33
- § 8:9.1 : Asset Allocation Vehicles8-33
- § 8:9.2 : Exchange Traded UITs8-35
- § 8:10 : Conclusion8-40
- Appendix 8A : Differences Between UITs and Mutual FundsApp. 8A-1
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Chapter 9: |
Money Market Funds |
Douglas Dick ~ Dechert LLP
Jack W. Murphy ~ Dechert LLP
Stephen T. Cohen ~ Dechert LLP
Brenden P. Carroll ~ Dechert LLP |
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- § 9:1 : Introduction9-3
- § 9:2 : What Is a Money Market Fund?9-4
- § 9:3 : Rule 2a-79-7
- § 9:3.1 : Exemption from Standard Valuation Procedures9-7
- § 9:3.2 : Holding Out and Use of Names and Titles9-8
- § 9:3.3 : Board Findings and Procedures for Rule 2a-7 Reliance9-8
- [A] : Required Board Findings9-8
- [B] : Required Procedures: Funds Using the Amortized Cost Method9-9
- [B][1] : Shadow Pricing and Related Board Actions9-9
- [C] : Required Procedures: Funds Using the Penny-Rounding Method9-10
- [D] : Specific Procedures: All Funds9-11
- [D][1] : Stress Testing9-11
- [D][2] : Other Specific Products9-12
- § 9:3.4 : The Risk-Limiting Provisions9-14
- [A] : Maturity9-14
- [A][1] : Portfolio Maturity9-14
- [A][1][a] : Calculating Weighted Average Life9-15
- [A][2] : Maturity of Portfolio Securities9-16
- [A][2][a] : Adjustable Rate Government Securities9-17
- [A][2][b] : Variable Rate Securities9-17
- [A][2][c] : Floating Rate Securities9-18
- [A][2][d] : Repurchase Agreements9-18
- [A][2][e] : Portfolio Lending Agreements9-19
- [A][2][f] : Money Market Fund Shares9-19
- [B] : Portfolio Quality9-20
- [B][1] : U.S. Dollar Denominated Securities9-20
- [B][2] : Securities Presenting Minimal Credit Risk9-20
- [B][3] : Eligible Securities9-22
- [B][3][a] : First Tier and Second Tier Securities9-23
- [B][3][b] : Rated Securities9-24
- [B][3][c] : Unrated Securities9-25
- [B][3][d] : Securities Subject to Guarantees or Demand Features9-26
- [B][3][e] : Designated NRSROs9-29
- [C] : Portfolio Diversification9-30
- [C][1] : Issuer Diversification9-31
- [C][1][a] : General Diversification Requirements9-31
- [C][1][a][i] : Taxable and National Funds9-31
- [C][1][a][ii] : Single State Funds9-32
- [C][1][b] : Diversification Requirements for Second Tier Securities9-33
- [C][1][c] : Guidelines for Calculating Issuer Diversification9-33
- [C][1][c][i] : Repurchase Agreements, Refunded Securities, and Conduit Securities9-34
- [C][1][c][ii] : Refunded Securities and Conduit Securities9-35
- [C][1][c][iii] : Asset-Backed Securities9-36
- [C][1][c][iv] : Shares of Money Market Funds9-37
- [C][2] : Demand Feature and Guarantee Diversification9-37
- [C][2][a] : Diversification Requirements for Demand Features and Guarantees9-37
- [C][2][b] : Guidelines for Calculating Demand Feature and Guarantee Diversification9-39
- [D] : Portfolio Liquidity9-40
- [D][1] : Background9-40
- [D][2] : Portfolio Liquidity Requirements9-41
- [D][2][a] : General Liquidity Requirement/Know Your Customer Procedures9-42
- [D][2][b] : Overall Limitation on the Acquisition of Illiquid Securities9-43
- [D][2][c] : Minimum Daily and Weekly Requirements9-44
- § 9:3.5 : Downgrades and Defaults of Portfolio Securities9-46
- [A] : Downgrades9-46
- [B] : Securities Subject to Demand Features9-46
- [C] : Defaults and Other Events Requiring Disposition9-47
- [D] : Responding to Issues in Less Liquid Markets9-48
- [E] : Notice to the SEC9-51
- § 9:3.6 : Disclosure of Portfolio Information on Public Website9-51
- § 9:3.7 : Recordkeeping9-53
- § 9:3.8 : Delegation of Board Responsibilities9-54
- § 9:4 : Buyouts of Problematic Securities9-55
- § 9:5 : Industry Concentration9-57
- § 9:6 : Disclosure and Advertising Standards9-58
- § 9:6.1 : Disclosure9-58
- [A] : Form N-1A9-58
- [B] : Form N-MFP9-59
- § 9:6.2 : Advertising9-64
- § 9:7 : Suspension of Redemptions9-66
- § 9:8 : Processing of Purchases and Redemptions9-67
- § 9:9 : Next Steps—The Ongoing Debate9-67
- § 9:9.1 : PWG Report9-67
- § 9:9.2 : SEC Roundtable9-69
- § 9:9.3 : ICI Summit9-70
- § 9:9.4 : FSOC 2011 Annual Report9-70
- § 9:9.5 : Potential Proposals to Further Amend Rule 2a-79-71
- [A] : Floating Net Asset Value9-73
- [B] : Capital Requirements and Limitations or Fees on Redemptions9-73
- [B][1] : Capital Requirements9-73
- [B][2] : Limitations or Fees on Redemptions9-74
- [C] : Possible Oversight by FSOC9-75
- § 9:10 : Conclusion9-77
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Chapter 10: |
Wrap Fee Programs; And Appendix 10A: Part 2A Appendix 1 of Form ADV |
Eric C Freed ~ American Skandia Life Assurance Corp |
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- § 10:1 : Background10-1
- § 10:1.1 : The Classic Wrap Fee Program10-2
- § 10:1.2 : The Mutual Fund Wrap Program10-3
- § 10:2 : The Legal Issues10-3
- § 10:2.1 : Wrap Fee Programs As Investment Companies10-3
- § 10:2.2 : Other Substantive Issues10-6
- [A] : Suitability10-6
- [B] : Best Execution10-7
- [C] : Principal Transactions10-8
- § 10:2.3 : Disclosure Requirements10-9
- Appendix 10A : Part 2A Appendix 1 of Form ADVApp. 10A-1
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Chapter 11: |
Hedge Funds |
Scott J. Lederman ~ Grosvenor Capital Management, LP |
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- § 11:1 : Introduction11-4
- § 11:2 : What Exactly Is a Hedge Fund?11-6
- § 11:2.1 : Diverse Strategies11-6
- § 11:2.2 : Common Characteristics11-8
- § 11:3 : Raising Capital11-9
- § 11:3.1 : Private Placement11-9
- [A] : Regulation D11-9
- [B] : Accredited Investors11-10
- [B][1] : Adjustments and Review of the Accredited Investor Standard11-10
- [B][2] : Proposed Amendments: “Accredited Natural Person”11-12
- [B][3] : Proposed Amendments: Alternative “Investments-Owned” Standard and Exemption for “Large Accredited Investors”11-15
- [C] : Non-Accredited Investors11-16
- [D] : Disclosure Requirements11-17
- [E] : Manner of the Offering11-19
- [F] : Limits on Resales11-21
- [G] : Disqualified Offerings11-22
- [H] : Post-Sale Filing11-22
- § 11:3.2 : State Law Preemption11-27
- § 11:3.3 : Related Considerations Affecting the Size and Scope of the Private Placement11-29
- § 11:3.4 : FINRA Considerations11-34
- § 11:3.5 : Commodity Pools11-36
- [A] : Disclosure Document11-37
- [B] : Reporting and Record-Keeping11-42
- [C] : Exemptions from Disclosure, Reporting, and Record-Keeping Requirements11-43
- [C][1] : Rule 4.12(b)11-43
- [C][2] : Rule 4.711-44
- [C][3] : Offshore Commodity Pools11-49
- [C][4] : Electronic Filing11-51
- § 11:4 : Private Investment Company Exception11-51
- § 11:4.1 : Hybrid Funds11-57
- § 11:5 : Hedge Fund Manager11-58
- § 11:5.1 : Bifurcated Regulation11-59
- [A] : Federal Registration11-64
- [B] : Implications of Federal Registration11-73
- § 11:5.2 : Exemption from Registration11-80
- [A] : Private Adviser Exemption11-80
- [B] : Private Fund Exemptions11-81
- [B][1] : The Private Fund11-81
- [B][2] : Private Fund Adviser Exemption11-81
- [B][3] : Venture Capital Funds11-83
- [B][4] : Exempt Reporting Advisers11-85
- [B][5] : Foreign Private Advisers11-89
- [B][6] : Other Exemptions from Registration11-91
- [B][6][a] : Intra-State Exemption11-91
- [B][6][b] : CTA Exemption11-92
- [B][6][c] : Family Office11-92
- [C] : Jurisdictional Reach of Advisory Regulators11-92
- [C][1] : State Oversight11-92
- [C][2] : Federal Anti-Fraud Rule11-93
- § 11:5.3 : Performance-Based Compensation11-95
- § 11:5.4 : Privacy Regulations11-97
- § 11:5.5 : Anti-Money Laundering Regulations11-100
- § 11:5.6 : Commodity Pool Operator11-102
- § 11:5.7 : Commodity Trading Adviser11-103
- § 11:5.8 : Registration of CPOs and CTAs11-103
- § 11:5.9 : Exclusions and Exemptions from Registration of CPOs and CTAs11-104
- [A] : Section 4.5 Exclusion from the Definition of Commodity Pool Operator11-104
- [B] : Section 4.13 Exemptions from Registration As a Commodity Pool Operator11-106
- [B][1] : Section 4.13(a)(1) No Compensation Exemption11-106
- [B][2] : Section 4.13(a)(2) Small Operator Exemption11-107
- [B][3] : Section 4.13(a)(3) Limited Futures Trading Exemption11-107
- [B][4] : Section 4.13(a)(4) Sophisticated Investor Exemption11-108
- [C] : Exemptions from Registration As a Commodity Trading Adviser11-110
- [C][1] : Section 4.14(a)(4) and (a)(5) CPO Exemptions11-110
- [C][2] : Section 4.14(a)(8) Registered Investment Adviser Exemption11-110
- [C][3] : Section 4.14(a)(10) Private CTA Exemption11-111
- [D] : Electronic Filing11-112
- § 11:6 : Market Participation11-112
- § 11:6.1 : Broker-Dealer Status11-113
- § 11:6.2 : New Issues11-114
- [A] : Rule 513011-114
- [B] : Rule 513111-119
- § 11:6.3 : Soft Dollars11-121
- [A] : Goods or Services Provided by the Broker11-123
- [B] : Investment Discretion11-124
- [C] : Good-Faith Determination11-125
- [D] : Brokerage and Research Services11-125
- [D][1] : Research11-126
- [D][2] : Brokerage11-127
- [D][3] : Mixed-Use Items11-128
- [D][4] : Lawful and Appropriate Assistance11-129
- [E] : Operating Outside the Safe Harbor11-130
- § 11:6.4 : Sections 13(d) and 13(g)11-130
- § 11:6.5 : Section 13(f)11-133
- § 11:6.6 : Section 13(h)11-133
- § 11:6.7 : Section 1611-138
- § 11:6.8 : Additional Reporting Considerations11-140
- § 11:7 : Systemic Risk Regulation11-142
- § 11:7.1 : Financial Stability Oversight Council11-142
- § 11:7.2 : Nonbank Financial Company11-143
- [A] : Supervision and Regulation of Certain Nonbank Financial Companies11-144
- [B] : Prudential Regulation11-145
- [C] : Reporting11-148
- [D] : Orderly Liquidation11-150
- [E] : Systemic Risk Information11-152
- § 11:8 : Derivatives Markets Participants11-159
- § 11:8.1 : Regulatory Jurisdiction Over Swaps11-160
- § 11:8.2 : Clearing and Exchange Trading11-162
- § 11:8.3 : Swap Dealers and Major Swap Participants11-162
- [A] : Definition of “Swap Dealer” and “Security-Based Swap Dealer”11-162
- [B] : Definition of “Major Swap Participant” and “Major Security-Based Swap Participant”11-167
- [C] : Registration11-172
- [D] : Regulatory Capital and Margin11-173
- [E] : Reporting and Record-Keeping11-174
- [F] : Compliance Duties11-176
- [F][1] : Risk Management11-177
- [F][2] : Monitoring of Position Limits11-178
- [F][3] : Diligent Supervision11-179
- [F][4] : Business Continuity and Disaster Recovery11-179
- [F][5] : Disclosure and Ability to Obtain Information11-179
- [F][6] : Antitrust Considerations11-179
- [F][7] : Chief Compliance Officer11-179
- [G] : Business Conduct Standards11-182
- [G][1] : Anti-Fraud and Anti-Manipulation Regulations11-183
- [G][1][a] : Swaps11-183
- [G][1][b] : Security-Based Swaps11-185
- [G][2] : Verification of Counterparty Eligibility11-187
- [G][3] : Disclosure of Material Risks, Characteristics, Material Incentives and Conflicts of Interest Regarding a Swap11-188
- [G][4] : Daily Mark11-189
- [G][5] : Clearing11-190
- [G][6] : Communications—Fair Dealing11-190
- [G][7] : Recommendations to Counterparties—Institutional Suitability11-190
- [G][8] : Execution Standards11-191
- [G][9] : Swap Documentation Standards11-192
- [G][10] : Portfolio Confirmation, Reconciliation and Compression11-193
- [G][10][a] : Portfolio Confirmation11-193
- [G][10][b] : Portfolio Reconciliation11-195
- [G][10][c] : Portfolio Compression11-196
- [G][11] : Conflicts of Interest11-196
- [H] : Special Obligations Regarding Special Entity11-198
- § 11:9 : Rationale for Regulation11-198
|
|
Chapter 12: |
International Investment Funds; And Appendix 12A: Comparative Guide to Offshore Investment Products |
Robert W. Helm ~ Dechert LLP |
|
- § 12:1 : Introduction12-5
- § 12:2 : Offshore Funds12-6
- § 12:2.1 : Offshore Fund Jurisdictions12-6
- § 12:2.2 : Selecting an Offshore Fund Jurisdiction12-7
- [A] : Type of Fund—Investment Policy12-8
- [B] : Distribution Considerations12-8
- [C] : Structural Considerations12-9
- [D] : Servicing Considerations12-10
- [E] : Tax Considerations12-10
- [F] : Intangibles12-10
- [G] : Listing Opportunities12-11
- § 12:2.3 : Structuring Offshore Funds and Integrating Offshore Funds with Domestic Products12-11
- [A] : “Mirror” Offshore Funds12-11
- [A][1] : Integration12-11
- [A][2] : Use of Adviser Performance Record12-12
- [B] : Multiple Classes of Shares12-12
- [C] : Fund of Funds Structure12-13
- [D] : Master/Feeder Structure12-14
- [D][1] : Master/Feeder Requirements12-14
- [D][2] : Tax Considerations for Master/Feeder Arrangements12-15
- [D][3] : Use of Master/Feeder Fund Structure for Offshore Markets12-16
- [D][4] : Advantages of Master/Feeder Structure in Onshore/Offshore Context12-17
- [D][5] : Disadvantages12-17
- § 12:2.4 : Cloning12-17
- § 12:3 : U.S. Securities Law Considerations Applicable to U.S. Sponsors of Offshore Funds12-19
- § 12:3.1 : Section 7(d) of the Investment Company Act12-19
- § 12:3.2 : Section 5 of the Securities Act12-20
- § 12:3.3 : Section 3(c)(1) and Section 3(c)(7) Funds12-22
- [A] : Section 3(c)(1)12-22
- [B] : Section 3(c)(7)—Qualified Purchaser Fund Exception12-25
- [B][1] : Qualified Purchaser Defined12-25
- [B][2] : Pension Plans As Qualified Purchasers12-28
- [B][3] : Other Qualified Purchaser Issues12-28
- [B][4] : Conversion from a Section 3(c)(1) Fund to a Section 3(c)(7) Fund12-28
- [B][5] : Coordination with CFTC Exemptive Rules12-29
- [C] : Integration with Foreign Public Offerings12-30
- [D] : Integration of Section 3(c)(1) and Section 3(c)(7) Funds12-31
- [E] : Use of Section 3(c)(1) and Section 3(c)(7) Funds in Master/Feeder Structures12-32
- [F] : Federal Income Tax Implications12-33
- § 12:3.4 : Investment Adviser Registration and Reporting Requirements12-34
- [A] : Investment Adviser Registration Requirements12-34
- [B] : Registered Investment Adviser Reporting Requirements12-35
- § 12:3.5 : Regulation S and Related Interpretations12-38
- § 12:3.6 : Development of the Definition of “U.S. Person” Under U.S. Securities Laws12-41
- § 12:3.7 : Rule 144A12-42
- § 12:3.8 : Offshore Funds Conducting Various Administrative Operations in the United States12-42
- § 12:3.9 : Extraterritorial Application of Anti-Fraud Provisions of the U.S. Securities Laws12-43
- § 12:3.10 : Use of Electronic Means for Prospectus Delivery and Marketing of Investment Products12-44
- [A] : E-Delivery of Form ADV12-45
- § 12:3.11 : Anti-Money Laundering Programs12-47
- § 12:3.12 : Commodities Law Issues Affecting Non-U.S. Funds with U.S. Contacts12-49
- [A] : Exemption from CFTC Registration As a CPO: Limited Futures Trading Exemption12-50
- [B] : Proposed Rescission of the “Sophisticated Investor” and Limited Futures Trading Exemptions and Corresponding Consequences12-51
- [C] : Available Alternative to Part 4 Requirements Under Rule 4.712-53
- [D] : Exemptions from CFTC Registration As a CTA: Rule 4.14(a)(10)12-54
- [E] : “Foreign Futures” Exemption12-54
- § 12:3.13 : Commodities and Securities Law Issues Affecting Non-U.S. Funds Engaged in the OTC Derivatives Markets with U.S. Contacts12-57
- [A] : Scope of Products Covered by Title VII12-58
- [A][1] : Covered OTC Derivatives12-58
- [A][2] : OTC Derivatives That Are Not Covered12-59
- [B] : Clearing Requirements for Swaps12-59
- [B][1] : Swaps That Must Be Cleared12-59
- [B][2] : Status of Non-Cleared Swaps12-60
- [C] : Exchange Trading of Swaps12-60
- [D] : Segregation Requirements for Cleared and Non-Cleared Swaps12-61
- [E] : Major Swap Participants12-62
- [E][1] : Substantial Position Tests12-62
- [E][2] : Substantial Counterparty Exposure Test12-65
- [E][3] : Highly Leveraged Financial Entity Test12-65
- [F] : Consequences of Being a Major Swap Participant12-66
- [F][1] : Registration12-66
- [F][2] : New Regulatory Capital and Margin Requirements12-67
- [F][3] : New Reporting and Record-Keeping Obligations12-67
- [F][4] : New Business Conduct Standards for Major Swap Participants12-68
- § 12:3.14 : Broker-Dealer and Banking Law Issues12-69
- [A] : Broker-Dealer Registration12-69
- [B] : Banking Law12-70
- [B][1] : The Gramm-Leach-Bliley Act12-70
- [B][2] : Regulation R12-70
- [B][3] : The Volcker Rule12-71
- § 12:4 : U.S. Federal Income Tax Considerations Affecting Offshore Funds12-73
- § 12:4.1 : U.S. Tax Law Issues Relating to the Marketing of Shares of Non-U.S. Funds in the U.S.12-73
- [A] : U.S. Taxation of Non-U.S. Fund Treated As a Corporation for U.S. Tax Purposes12-73
- [B] : U.S. Taxation of U.S. Shareholders of Non-U.S. Fund12-75
- [C] : U.S. Taxation of Non-U.S. Fund Treated As a Partnership or Trust for U.S. Tax Purposes12-76
- § 12:4.2 : U.S. Tax Law Issues Relating to the Creation and Offering by U.S. Firms of Non-U.S. Investment Funds12-77
- [A] : Services Provided Through a U.S. Entity12-77
- [B] : Services Provided Through a Non-U.S. Entity12-77
- § 12:5 : Compliance with the Provisions of ERISA12-78
- § 12:6 : Registration of a Foreign Fund in the United States12-80
- § 12:6.1 : Exemptive Standard of Section 7(d)12-80
- § 12:6.2 : Rule 7d-1 and Funds Organized in (Primarily) Common Law Jurisdictions12-81
- § 12:6.3 : SEC Guidelines on Registration of Foreign Funds12-81
- § 12:6.4 : Further SEC and Industry Initiatives12-83
- § 12:6.5 : Foreign Funds Using American Depositary Receipts (ADRs)12-85
- § 12:7 : Marketing Shares of U.S. Funds Abroad12-86
- § 12:7.1 : Applicability of the Securities Act to the Offer and Sale of Fund Shares Outside the United States12-87
- [A] : Rule 482 Advertisements12-88
- [B] : Rule 482 Advertisements and the Foreign Broker-Dealer12-89
- § 12:7.2 : Applicability of the Investment Company Act to the Offer and Sale of Investment Company Shares Outside the United States12-89
- [A] : Supplemental Sales Literature12-90
- § 12:8 : European Regulatory Issues12-91
- § 12:8.1 : UCITS Directive12-91
- [A] : Eligible Investments12-92
- [B] : Diversification Requirements12-94
- [C] : UCITS III—The Product and Management Directive12-95
- [C][1] : The Product Directive12-95
- [C][2] : The Management Directive12-97
- [C][3] : UCITS IV12-97
- [C][4] : UCITS V12-98
- § 12:8.2 : Markets in Financial Instruments Directive12-99
- § 12:8.3 : Directive on Alternative Investment Fund Managers12-101
- [A] : Operational, Organizational and Leverage Requirements12-101
- [B] : Disclosure Requirements12-102
- [C] : Depositaries and Delegation12-103
- [D] : Compensation Restrictions12-103
- [E] : Third-Country Issues and Passporting12-103
- [F] : Private Placements12-104
- § 12:8.4 : Significance of EU Regulatory Initiatives12-105
- Appendix 12A : Comparative Guide to Offshore Investment ProductsApp. 12A-1
|
|
Chapter 13: |
Commodity Pools |
Susan C. Ervin ~ Davis Polk & Wardwell LLP |
|
- § 13:1 : Introduction13-2
- § 13:2 : Background: Futures Regulation in the United States13-3
- § 13:2.1 : Definitions: Commodities, Derivatives, Swaps, and Futures13-4
- § 13:2.2 : Key Parties in the Commodity Pool Marketplace13-5
- [A] : Commodity Pools13-5
- [B] : Commodity Pool Operators13-6
- [C] : Commodity Trading Advisors13-7
- [D] : Futures Commission Merchants and Introducing Brokers13-7
- [E] : Floor Brokers and Floor Traders13-7
- [F] : Swap Dealers13-8
- § 13:3 : CFTC Regulation of Commodity Pools13-8
- § 13:3.1 : Registration of the Commodity Pool Operator13-9
- § 13:3.2 : Disclosure, Reporting and Recordkeeping13-11
- § 13:3.3 : Structural Requirements for Organization and Operation13-11
- § 13:3.4 : Potential Investors13-12
- § 13:3.5 : Commodity Trading Advisor Regulation13-13
- § 13:4 : Special Regulatory Treatment for Certain Funds13-13
- § 13:4.1 : Mutual Funds and Other Regulated Investment Vehicles13-13
- § 13:4.2 : LimitedCommodity InterestTrading Exemption13-15
- § 13:4.3 : Sophisticated Investor Exemption13-16
- § 13:4.4 : Pools Restricted to “Qualified Eligible Persons”13-17
- § 13:4.5 : Rule 4.12(b): Pools Primarily Engaged in Securities Transactions13-20
- § 13:4.6 : Rule 4.13: Non-Profit and Small Pools13-21
- § 13:5 : Offshore Commodity Funds13-22
- § 13:5.1 : Non-U.S. Fund Manager; Non-U.S. Participants; Not Organized or Operated in the U.S.—Not Subject to Pool Regulation13-24
- § 13:5.2 : Offshore Fund Manager Marketing Offshore Fund to U.S. and Non-U.S. Participants—Full Commodity Pool Regulation Subject to “Foreign Futures” Exemption13-24
- § 13:5.3 : U.S. Fund Manager Offering Offshore Fund Only to Non-United States Persons—Partial Regulation13-26
- § 13:5.4 : U.S. Fund Manager Operating Fund with U.S. Participants—Full U.S. Commodity Pool Regulation13-28
- § 13:6 : Conclusion13-28
|
|
Chapter 14: |
Real Estate Investment Trusts; And Appendix 14A: Form S-11: Registration Statement Under the Securities Act for Certain Real Estate Companies |
Bartholomew Sheehan ~ Sidley Austin LLP
Marshall Feiring ~ Sidley Austin LLP |
|
- § 14:1 : Introduction14-2
- § 14:2 : What Is a REIT?14-3
- § 14:3 : Background and Development of the REIT Industry14-4
- § 14:3.1 : UPREITs14-6
- § 14:3.2 : DownREITs14-8
- § 14:4 : The Creation of a REIT and the Securities Laws14-9
- § 14:4.1 : Avoidance of the Roll-up Rules14-9
- § 14:4.2 : Preparation of the Registration Statement14-10
- [A] : Form S-11—For Registration Under the Securities Act of Certain Real Estate Companies14-11
- [B] : SEC Release No. 33-690014-11
- [C] : Selected Disclosure Requirements14-11
- § 14:5 : REITs and the Sarbanes-Oxley Act of 200214-12
- § 14:6 : REITs and Securities Act Reform14-13
- § 14:7 : Mortgage REITs and the Investment Company Act14-14
- § 14:8 : Qualification Under the Tax Code14-15
- § 14:8.1 : Requirements for Qualification14-15
- § 14:8.2 : Annual Income Tests14-16
- [A] : Rents from Real Property14-17
- [B] : Interest on Obligations Secured by Real Property14-18
- [C] : Income from Hedging14-20
- [D] : Foreign Currency Exchange Gains14-21
- § 14:8.3 : Failure to Meet Annual Income Tests14-21
- § 14:8.4 : Quarterly Asset Tests14-22
- § 14:8.5 : Failure to Meet Quarterly Asset Tests14-22
- § 14:8.6 : Application of Annual Income Tests and Quarterly Asset Tests to Certain REIT Affiliates14-23
- § 14:8.7 : Failure to Meet Other REIT Requirements14-24
- § 14:8.8 : Distributions14-25
- [A] : Annual Distribution Requirements14-25
- [B] : Special Temporary Rule for Stock Distributions14-26
- [C] : Impact of 2010 Legislation on REIT Distributions and Sales of REIT Shares14-27
- § 14:8.9 : Deficiency Dividends and Consent Dividends14-27
- § 14:8.10 : Shareholder Tests14-28
- § 14:8.11 : Excess Share Provisions14-29
- § 14:8.12 : Qualification and Election14-30
- § 14:8.13 : Limitations on Sale or Disposition of Assets14-30
- § 14:8.14 : Mortgage REITs and Special Considerations Under the Tax Code14-31
- § 14:9 : REITs and the Capital Markets14-32
- § 14:10 : Conclusion14-32
- Appendix 14A : Form S-11: Registration Statement Under the Securities Act for Certain Real Estate CompaniesApp. 14A-1
|
|
Chapter 15: |
Private Equity Funds: Legal Analysis of Structural, ERISA, Securities and Other Regulatory Issues |
Adrienne Atkinson ~ Wachtell Lipton Rosen & Katz
Amanda N Persaud ~ Wachtell Lipton Rosen & Katz |
|
- § 15:1 : Introduction15-3
- § 15:1.1 : What Is a Private Equity Fund?15-3
- § 15:2 : A Typical Private Equity Fund15-4
- § 15:2.1 : Fund Structure15-4
- § 15:2.2 : Management of the Fund15-4
- § 15:2.3 : Allocation of Profits15-6
- § 15:2.4 : Other Common Provisions15-8
- § 15:3 : Form of the Private Equity Fund (Tax and Liability Issues)15-9
- § 15:3.1 : Partnership15-10
- [A] : Tax Considerations of the Partnership Form15-10
- [A][1] : No Federal Income Tax at the Fund Level15-10
- [A][2] : Tax Considerations for Tax-Exempt Organizations15-11
- [A][3] : Tax Considerations for Foreign Persons15-14
- [A][4] : Special Tax Issues for Sovereign Wealth Investors15-15
- [A][5] : Pass-Through of Losses to Equity Owners15-15
- [A][6] : Tax-Free Distribution of Property to Equity Owners15-15
- [A][6][a] : Cash15-16
- [A][6][b] : Property15-16
- [A][6][c] : Marketable Securities15-17
- [A][7] : Tax-Favored Treatment of General Partner Carry15-17
- [A][8] : Utility of Foreign-Situs Partnerships in Foreign Investments15-18
- [B] : Other Advantages of the Partnership Form15-18
- [B][1] : Limited Liability15-18
- § 15:3.2 : Limited Liability Company (LLC)15-19
- [A] : Tax Issues15-20
- [B] : Liability Issues15-20
- [C] : Partnerships Still Predominate15-21
- § 15:4 : ERISA Issues15-21
- § 15:5 : Securities Law Issues15-25
- § 15:5.1 : Statutory Exemption: § 4(a)(2)15-27
- § 15:5.2 : Regulation D15-28
- [A] : Rule 50615-28
- [B] : Look-Through15-31
- [C] : Integration15-32
- § 15:5.3 : Other Exemptions15-33
- § 15:6 : Investment Company Act of 194015-35
- § 15:6.1 : Private Investment Fund Exemption15-36
- [A] : One Hundred Beneficial Owners Limitation15-36
- [B] : Look-Through Provisions15-37
- [B][1] : Automatic Statutory Look-Through15-37
- [B][2] : Secondary Look-Through Rules15-38
- [C] : Knowledgeable Employees15-39
- § 15:6.2 : Qualified Purchaser Fund Exemption15-39
- § 15:7 : Investment Advisers Act of 194015-42
- § 15:7.1 : New Jurisdictional Provisions and Exemptions Under Dodd-Frank15-43
- [A] : Jurisdictional Provisions15-43
- [B] : Exemptions from Registration15-44
- [B][1] : Venture Capital Fund Exemption15-45
- [B][2] : Private Fund Exemption15-46
- [B][3] : Foreign Private Adviser Exemption15-47
- [B][4] : Exempt Reporting Advisers15-47
- § 15:7.2 : Consequences of Registration15-48
- § 15:7.3 : Carried Interest Exemptions15-55
- [A] : Qualified Purchaser Funds15-55
- [B] : Rule 205-3: “Qualified Client” Exemption15-55
- § 15:8 : Additional Regulations15-56
- § 15:8.1 : Gramm-Leach-Bliley Act Privacy Rule15-56
- § 15:8.2 : Gramm-Leach-Bliley Act Safeguards Rule15-58
- § 15:8.3 : PATRIOT Act Anti-Money Laundering Programs15-60
- § 15:8.4 : “Pay-to-Play” and Placement Agent Regulations15-61
- § 15:8.5 : EU AIFM Directive15-64
- § 15:8.6 : Foreign Corrupt Practices Act15-65
- § 15:9 : Change in Control of Fund Sponsors15-66
|
|
Chapter 16: |
An Overview of the Formation and Operation of Exchange-Traded Products |
Bibb L. Strench ~ Seward & Kissel LLP
Alexandre V. Rourk ~ Seward & Kissel LLP |
|
- § 16:1 : Introduction16-2
- § 16:2 : Product Description16-3
- § 16:2.1 : Exchange-Traded Funds (ETFs)16-3
- § 16:2.2 : Exchange-Traded Vehicles (ETVs)16-4
- § 16:2.3 : Exchange-Traded Notes (ETNs)16-4
- § 16:3 : ETP Registration16-5
- § 16:3.1 : Registration of Securities16-5
- [A] : ETFs16-5
- [B] : ETVs and ETNs16-6
- § 16:3.2 : Entity Registration16-6
- § 16:3.3 : CFTC Registration16-6
- § 16:4 : Tax Considerations16-7
- § 16:4.1 : ETFs16-7
- § 16:4.2 : ETVs16-7
- § 16:4.3 : ETNs16-7
- § 16:5 : Exemptive Relief16-7
- § 16:5.1 : ETFs16-8
- § 16:5.2 : ETVs and ETNs16-9
- § 16:6 : Listing on an Exchange16-9
- § 16:7 : Governance Standards16-10
- § 16:7.1 : ETFs16-10
- § 16:7.2 : ETVs and ETNs16-11
- § 16:8 : Operational Issues16-11
- § 16:8.1 : Capital16-11
- [A] : ETFs16-11
- [B] : ETVs and ETNs16-12
- § 16:8.2 : Marketing16-12
- § 16:8.3 : Create/Redeem Process16-13
- [A] : ETFs and ETVs16-13
- [B] : ETNs16-13
- § 16:8.4 : Calculation of Net Asset Value16-13
- [A] : ETFs16-13
- [B] : ETVs16-14
- [C] : ETNs16-14
- § 16:8.5 : Fees16-15
- [A] : ETFs16-15
- [B] : ETVs16-15
- [C] : ETNs16-15
- § 16:9 : Domicile16-16
- § 16:9.1 : ETFs16-16
- § 16:9.2 : ETVs and ETNs16-16
- § 16:10 : Conclusion16-16
|
|
Chapter 17: |
Exchange Traded Funds |
Stuart M Strauss ~ Clifford Chance LLP |
|
- § 17:1 : Background17-2
- § 17:2 : Organizational Issues17-3
- § 17:2.1 : Form of Organization17-3
- § 17:2.2 : Mechanics of Purchases and Sales17-4
- [A] : Exchange Transactions17-4
- [B] : Transactions17-4
- [B][1] : Purchases17-4
- [B][2] : Redemptions17-5
- § 17:2.3 : The Arbitrage Process17-6
- § 17:2.4 : Tax Matters17-6
- [A] : ETFs As Compared to Mutual Funds17-6
- [B] : Tax Implications for Purchaser17-6
- [C] : Tax Implications for Redeemer17-6
- § 17:3 : Investment Company Act Issues17-7
- § 17:3.1 : Registration As an Open-End Company or a Unit Investment Trust17-7
- § 17:3.2 : Section 17(a)17-8
- § 17:3.3 : Section 1817-8
- § 17:3.4 : Section 22(d) and Rule 22c-117-9
- § 17:3.5 : Section 22(e)17-10
- § 17:3.6 : Section 2617-10
- § 17:4 : Exchange Act Issues17-11
- § 17:4.1 : Regulation M17-11
- § 17:4.2 : Tender Offers17-12
- § 17:4.3 : Margin17-12
- § 17:4.4 : Disclosure Requirements17-13
- [A] : Confirmations17-13
- [B] : Broker Relationship17-13
- [C] : Advance Notice of Corporate Actions17-14
- § 17:4.5 : Generic No-Action Relief17-14
- § 17:4.6 : Sections 13(d) and 16(a)17-15
- § 17:4.7 : NASD Conduct Rules17-15
- § 17:5 : New Products and Recent Developments17-16
- § 17:5.1 : Actively Managed ETFs17-16
- § 17:5.2 : ETFs on Alternative Asset Classes17-17
- § 17:5.3 : Investment in ETFs by Fund of Funds17-17
- § 17:5.4 : Investment in ETFs by Retirement Plans17-18
- § 17:5.5 : Proposed Rule 6c-1117-18
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Chapter 18: |
College Savings Plans; And Appendix 18A: Table of Municipal Securities Rulemaking Board Rules |
Michael B. Koffler ~ Sutherland
Steven B Boehm ~ Sutherland LLP |
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- § 18:1 : Overview of 529 Plans18-3
- § 18:1.1 : Prepaid Plans vs. Savings Plans18-3
- [A] : Prepaid Plans18-3
- [A][1] : Savings Plans18-6
- § 18:1.2 : Investment Structure18-6
- § 18:2 : Mechanics of Participation18-8
- § 18:3 : Tax Benefits18-8
- § 18:3.1 : Federal18-8
- § 18:3.2 : State18-9
- § 18:4 : The Cast of Characters18-9
- § 18:5 : The Regulatory Framework18-11
- § 18:5.1 : Exemptions from Statutory Framework Administered by the Commission18-11
- § 18:5.2 : The MSRB’s Rules Govern18-12
- § 18:5.3 : The MSRB and the Regulatory Structure for Municipal Securities18-12
- § 18:5.4 : Amending the MSRB’s Rules for Savings Plans18-14
- § 18:6 : Regulation Under the MSRB’s Rules18-15
- § 18:6.1 : Classifications of Principals and Representatives, Testing and Continuing Education: Rule G-318-15
- § 18:6.2 : Confirmations and Point of Sale Disclosure18-17
- § 18:6.3 : Conduct of Municipal Securities Activities: Rule G-1718-19
- [A] : General Requirements18-19
- [B] : Additional Responsibilities for Savings Plans18-21
- [B][1] : Established Industry Sources18-22
- [B][2] : Additional Disclosure Obligations18-23
- [B][3] : Use of the Official Statement to Satisfy Point-of-Sale Disclosure Obligations18-25
- § 18:6.4 : Suitability of Recommendations and Transactions: Rule G-1918-26
- [A] : Additional Requirements in Connection with Out-of-State Sales18-28
- § 18:6.5 : Gifts, Gratuities, and Non-Cash Compensation: Rule G-2018-29
- § 18:6.6 : Advertising: Rule G-2118-32
- [A] : Advertisements18-32
- [A][1] : General Disclosures18-33
- [A][2] : Performance Data Disclosures18-34
- [A][3] : Format18-34
- [A][4] : Calculation and Display of Performance Data18-35
- [A][5] : Nature of Issuer and Security18-37
- [A][6] : Capacity of the Broker-Dealer and Other Parties18-37
- [A][7] : Tax Consequences and Other Features18-38
- [A][8] : Underlying Registered Securities18-38
- [B] : Do-Not-Call Registry18-39
- § 18:6.7 : Supervision: Rule G-2718-39
- § 18:6.8 : Pricing and Commissions: Rule G-3018-41
- § 18:6.9 : Disclosure for Savings Plans: Rule G-3218-42
- [A] : Electronic Delivery by Primary Distributors18-43
- § 18:6.10 : “Pay-to-Play:” Rule G-3718-45
- [A] : Substantive Provisions18-45
- [B] : Persons Covered18-46
- [C] : Reporting Requirements18-48
- [D] : Application of Rule G-37 to Savings Plans18-49
- [D][1] : Status of Selling Broker-Dealers18-49
- [D][2] : Status of Wholesalers18-50
- [D][3] : The Effect of a Ban on Municipal Securities Business Under Rule G-37 Arising During a Pre-Existing Engagement Relating to Municipal Fund Securities18-51
- [E] : Indirect Violations18-51
- [F] : Exemptions18-53
- § 18:6.11 : Solicitation of Municipal Securities Business: Rule G-3818-54
- § 18:7 : Rule 15c2-12 Under the Securities Exchange Act18-56
- § 18:7.1 : Initial Disclosure18-56
- § 18:7.2 : Continuing Disclosure18-57
- § 18:7.3 : Financial Statements18-58
- § 18:8 : Official Statement Content18-59
- § 18:8.1 : Regulators’ Concerns18-59
- § 18:8.2 : Voluntary Disclosure Principles18-60
- § 18:9 : Bank Distribution18-61
- § 18:10 : Marketing 529 Plans in the Workplace18-63
- § 18:11 : Enforcement and Regulatory Developments18-64
- Appendix 18A : Table of Municipal Securities Rulemaking Board RulesApp. 18A-1
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Chapter 19: |
A Primer on Derivative Contracts and Their Regulation; And Appendices 19A-19E |
James A Overdahl ~ US Securities & Exchange Commission
Robert Zwirb ~ Cadwalader Wickersham & Taft LLP |
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- § 19:1 : Introduction19-2
- § 19:2 : Derivatives Defined19-3
- § 19:2.1 : Generally19-3
- § 19:2.2 : Types of Derivative Contracts19-5
- [A] : Forward Contracts19-5
- [B] : Futures Contracts19-6
- [B][1] : Generally19-6
- [B][2] : Forwards versus Futures19-7
- [C] : Options19-9
- [C][1] : Generally19-9
- [C][2] : Over the Counter Options19-11
- [C][3] : OTC Interest Rate Products19-11
- [D] : Swaps19-12
- [E] : Structured Notes19-14
- § 19:3 : Size of the Market for Derivatives19-15
- § 19:3.1 : Sources of Information and Data19-15
- § 19:3.2 : Exchange-Traded Derivatives19-15
- § 19:3.3 : Privately Negotiated Derivatives19-15
- § 19:4 : How Are Derivatives Used?19-16
- § 19:4.1 : Hedging19-16
- § 19:4.2 : Lowering Funding Costs19-17
- § 19:4.3 : Profit Opportunity19-17
- § 19:4.4 : Efficient Portfolio Management19-18
- § 19:5 : Regulation of Derivative Products19-18
- § 19:5.1 : Generally19-18
- § 19:5.2 : Legal Certainty for OTC Derivatives19-19
- § 19:5.3 : Regulatory Reform for the Futures Industry19-22
- § 19:5.4 : Security Futures Products19-23
- § 19:5.5 : Legal Certainty for Exempt Commodities19-25
- § 19:6 : Post-CFMA Efforts to Increase Oversight of OTC Derivatives19-26
- § 19:7 : Pre-Dodd-Frank Act Efforts to Increase Regulation of OTC Derivatives19-28
- § 19:8 : Wall Street Transparency and Accountability Act of 201019-30
- Appendix 19A : 2010 Global Exchange-Traded Derivatives Contract Volume (Futures and Options)App. 19A-1
- Appendix 19B : Total Exchange-Traded Derivatives by RegionApp. 19B-1
- Appendix 19C : Top Ten Global Futures Contracts (by 2010 Volume)App. 19C-1
- Appendix 19D : Top Ten Global Derivatives Exchanges (by 2010 Volume)App. 19D-1
- Appendix 19E : Privately Negotiated Derivatives Outstanding (Notional Amounts in $ Billions)App. 19E-1
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Chapter 20: |
An Introduction to Variable Insurance Products |
Dodie Kent ~ AXA Equitable Life Insurance Company |
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- § 20:1 : Background—Variable Annuities and Variable Life Insurance20-3
- § 20:2 : Variable Annuities in Today’s Marketplace20-3
- § 20:2.1 : Generally20-3
- § 20:2.2 : Variable Annuities in the Retail Marketplace20-4
- [A] : Generally20-4
- [B] : Insurance and Other Guarantee Features20-5
- [C] : Variable Annuity Share Classes20-8
- [D] : Unique Investment Features20-9
- § 20:2.3 : Annuities Sold in the Retirement Marketplace20-10
- § 20:3 : Variable Life Insurance in Today’s Marketplace20-10
- § 20:3.1 : Generally20-10
- § 20:3.2 : Variable Life Insurance in the Retail Marketplace20-11
- § 20:3.3 : Life Insurance Sold to Individuals through Employers and Associations20-11
- § 20:3.4 : Life Insurance Sold to Businesses (Corporate Owned Life Insurance)20-12
- § 20:4 : Legal Structure20-12
- § 20:5 : Regulatory Treatment of Variable Products20-15
- § 20:5.1 : Generally20-15
- § 20:5.2 : Product Design and Approval20-16
- [A] : State Insurance Requirements Regarding Product Design and Approval20-16
- [B] : Federal Securities Laws Regarding Product Design and Approval20-16
- [B][1] : Background20-16
- [B][2] : Private Offering Exception20-18
- [B][3] : Retirement Plan Exemption20-18
- [C] : State Securities Laws20-19
- § 20:5.3 : Product Administration20-19
- § 20:5.4 : Product Distribution20-21
- [A] : Background20-21
- [B] : FINRA Regulation20-22
- [B][1] : Generally20-22
- [B][2] : Requirements Governing the Suitability of Variable Annuity Transactions20-23
- [B][2][a] : NASD’s Suitability Rule Applying to Recommended Transactions—Conduct Rule 231020-23
- [B][2][b] : Guidance Concerning Variable Annuity Exchanges20-24
- [B][3] : Controls Over Marketing Material: Review, Content, and Filing Requirements20-25
- [B][4] : Requirement to Adopt and Implement a Supervisory System Over Sales Activity20-26
- [B][4][a] : Written Supervisory Procedures20-26
- [B][4][b] : Chain of Supervision20-26
- [B][4][c] : Approval of Transactions20-26
- [B][4][d] : Approval of Correspondence20-26
- [B][4][e] : Annual Compliance Meetings with Representatives20-27
- [B][4][f] : Office Designations20-27
- [B][4][g] : Inspections20-27
- [B][4][h] : “Outside” Activities of a Representative20-27
- [B][4][i] : Continuing Education Requirements20-27
- [B][5] : Requirement to Establish an Effective Compliance Program20-28
- [B][6] : Controls Over Compensation20-28
- [B][7] : Examinations and Enforcement20-28
- [C] : Group Variable Annuities—Regulation Under FINRA Rules20-30
- § 20:5.5 : Marketing20-31
- [A] : Generally20-31
- [B] : SEC Rules20-31
- [C] : FINRA Rules20-32
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Chapter 21: |
Organization of Private Investment Funds: Basic Structural and Legal Issues |
Peter M. Rosenblum ~ Foley Hoag LLP |
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- § 21:1 : Introduction21-2
- § 21:2 : Basic Investment Fund21-3
- § 21:3 : Side-by-Side Funds21-4
- § 21:4 : Mini-Master-Feeder Model21-7
- § 21:5 : Legal Background21-9
- § 21:5.1 : Securities Act of 1933 (“Securities Act”)21-10
- § 21:5.2 : Securities Exchange Act of 1934 (the “Exchange Act”)21-11
- § 21:5.3 : Investment Company Act of 194021-12
- § 21:5.4 : Investment Advisers Act of 194021-14
- § 21:5.5 : State Securities Regulation21-15
- [A] : Offering21-16
- [B] : Advisor Registration21-16
- § 21:6 : Tax Considerations21-17
- § 21:6.1 : “Carried Interest” Versus Performance Fee21-17
- [A] : Characterization21-17
- [A][1] : Carried Interest21-17
- [A][2] : Performance Fee21-18
- [B] : Tax Considerations21-18
- [B][1] : Carried Interest21-18
- [B][2] : Performance Fee21-20
- [B][2][a] : Investment Advisor’s Tax Treatment21-20
- [B][2][b] : Investors’ Tax Treatment21-21
- [B][3] : State Tax Considerations21-21
- § 21:6.2 : Partnership Interests As Employee Compensation21-21
- [A] : Business Issues21-22
- [B] : Tax Issues21-22
- § 21:7 : Legal Issues Under the Investment Company Act and the Investment Advisers Act21-22
- § 21:7.1 : Section 3(c)(1) of the Investment Company Act of 194021-23
- [A] : Public Offering21-23
- [B] : Number of Beneficial Owners21-25
- [B][1] : Husband and Wife21-25
- [B][2] : Participant-Directed Investments by Benefit Plans21-26
- [B][3] : Integration21-28
- [B][4] : Concentration of Investment21-31
- [B][5] : Section 3(c)(1)(A) Attribution21-32
- [B][6] : Certain Transferees21-34
- § 21:7.2 : Section 3(c)(7) of the Investment Company Act21-34
- § 21:7.3 : Investment Advisers Act of 194021-36
- [A] : Registration21-36
- [B] : Exemptions21-37
- [C] : Prohibition from Registration21-39
- [D] : Performance-Based Fees21-40
- [D][1] : Clients Qualifying21-40
- [D][2] : Additional Limitations21-41
- [D][3] : Other Limits on Performance Fees21-42
- [E] : Antifraud Provisions21-42
- § 21:8 : Fund Data on the Worldwide Web21-43
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Chapter 22: |
Real Estate Mortgage Investment Conduits (REMICs); And Appendices 22A-22B |
Robert M Kreitman ~ Sidley Austin LLP
Marshall Feiring ~ Sidley Austin LLP |
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- § 22:1 : Overview22-3
- § 22:1.1 : Generally and Recent Developments22-3
- [A] : Generally22-3
- [B] : Recent Developments22-4
- § 22:1.2 : Benefits of REMIC Qualification22-5
- § 22:1.3 : Drawbacks of REMIC Qualification22-5
- § 22:1.4 : Internal Revenue Code Compels Use of REMICs for Securitizing Mortgage Loans22-6
- § 22:2 : Requirements for Qualification As a REMIC22-7
- § 22:2.1 : Generally22-7
- § 22:2.2 : Asset Test22-7
- [A] : Generally22-7
- [B] : Qualified Mortgages22-8
- [B][1] : Generally22-8
- [B][2] : Principally Secured22-8
- [B][3] : Credit Enhancement Contracts22-9
- [B][4] : Permitted Investments22-10
- § 22:2.3 : REMIC Election22-11
- § 22:2.4 : Interests Issued to Investors22-11
- [A] : Regular Interests22-11
- [B] : Residual Interests22-13
- [C] : Certain Rights Not Treated As REMIC Interests22-13
- § 22:2.5 : Arrangements Test22-13
- § 22:3 : REMIC Formation22-14
- § 22:4 : Federal Income Tax Treatment of a REMIC22-15
- § 22:4.1 : Pass-Through Status22-15
- § 22:4.2 : Determination of REMIC Taxable Income or Net Loss22-15
- § 22:4.3 : Property Distributions22-16
- § 22:4.4 : Prohibited Transactions22-16
- § 22:5 : Federal Income Taxation of Regular Interest Holders22-18
- § 22:5.1 : Overview22-18
- [A] : Generally22-18
- [B] : No Negative OID22-18
- [C] : Basis22-19
- § 22:5.2 : Regular Interests Received in Exchange for Property22-19
- § 22:6 : Federal Income Taxation of Residual Interest Holders22-19
- § 22:6.1 : Generally22-19
- [A] : Income or Loss22-19
- [B] : Distributions22-20
- [C] : Limitations on Losses22-20
- § 22:6.2 : Adjusted Basis of Residual Interests22-20
- § 22:6.3 : Special Treatment of “Excess Inclusions”22-21
- [A] : Generally22-21
- [B] : Special Rules for Residual Interests Held by REITs22-21
- § 22:6.4 : Restrictions on Transfers of Residual Interests22-22
- [A] : Generally22-22
- [B] : Stopping Transfers That Prevent Tax Being Imposed on Excess Inclusions22-22
- [C] : Stopping Transfers to Foreign Persons Who Will Not Hold the Residual Interest in Connection with a U.S. Trade or Business22-24
- § 22:6.5 : Wash Sale Rules and Dispositions of Residual Interests22-24
- § 22:6.6 : Inducement Payments22-25
- § 22:7 : Special Aspects of Commercial REMICs22-26
- § 22:7.1 : Overview of Commercial Loan REMICs22-26
- § 22:7.2 : Defeasance of REMIC-Held Commercial Loans22-27
- § 22:7.3 : Modifications of Mortgage Loan Terms22-27
- [A] : Overview22-27
- [B] : Significant Modification Under Code Section 100122-29
- [B][1] : Modification22-29
- [B][2] : Significant22-30
- [C] : Specific Exceptions for Modifications of REMIC-Held Mortgages22-30
- [C][1] : General22-30
- [C][2] : How Far in the Future Can a Default Be Anticipated and Still Be “Reasonably Foreseeable”22-30
- [D] : Other REMIC-Specific Exceptions22-31
- [D][1] : Satisfying the Post-Modification Principally Secured Test22-32
- [D][2] : Satisfying the Post-Modification Principally Secured Test Where a Mortgage Loan Is Secured by Multiple Properties22-33
- [D][2][a] : Grandfathered Transaction22-33
- [D][2][b] : Qualified Pay-Down Transaction22-33
- § 22:7.4 : Foreclosure Property22-35
- [A] : Generally22-35
- [B] : Net Income from Foreclosure Property22-35
- [C] : Foreign Investor Real Property Tax Act (FIRPTA)22-36
- [D] : Collateral Not Qualifying As Foreclosure Property—Swaps22-36
- [E] : Credit Enhancement Contracts22-37
- Appendix 22A : Application of OID Rules to REMIC Regular InterestsApp. 22A-1
- Appendix 22B : Compliance with Specified Portion RulesApp. 22B-1
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Chapter 23: |
Table of Authorities |
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Chapter 24: |
Index to Financial Product Fundamentals |
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