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Table of Contents | |
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Introduction | |
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Chapter 1: |
From Innovation to Industry | |
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- § 1:1 : The Birth and Growth of Hedge Funds1-1
- § 1:2 : A Variety of Alternatives—Hedge Fund Strategies1-7
- § 1:2.1 : Hedged Equities1-7
- § 1:2.2 : Global Opportunistic1-8
- § 1:2.3 : Arbitrage1-9
- § 1:3 : Defining the Hedge Fund; The Three A’s: Alternative, Absolute, and Alpha1-16
- § 1:4 : Reasons for Growth1-20
- § 1:4.1 : Demand and Supply1-20
- § 1:4.2 : Low Barriers to Entry1-22
- § 1:5 : Industry Convergence1-23
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Chapter 2: |
Form Over Substance: Hedge Fund Structures | |
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- § 2:1 : Hedge Fund Design—The Jones Blueprint2-2
- § 2:2 : Common Characteristics2-3
- § 2:2.1 : Centralized Management2-3
- § 2:2.2 : Co-Investment2-3
- § 2:2.3 : Performance-Based Compensation2-3
- § 2:2.4 : Limited Liquidity2-3
- § 2:3 : Domestic Hedge Funds2-4
- § 2:3.1 : Limited Liability2-4
- § 2:3.2 : Tax Efficiency2-6
- § 2:3.3 : Flexible Terms2-7
- [A] : Management Fees2-7
- [B] : Expense Pass-Throughs2-8
- [C] : Performance-Based Allocations2-9
- [C][1] : High Water Marks2-10
- [C][2] : Hurdles2-11
- [C][3] : Regulatory Considerations2-12
- [D] : Liquidity2-14
- [D][1] : Portfolio Characteristics2-14
- [D][2] : Publicly Traded Partnership Status2-15
- [D][3] : Liquidity Management Tools2-15
- [D][3][a] : Lock-Ups2-16
- [D][3][b] : Gates2-16
- [D][3][c] : Settlement Terms2-17
- [E] : Multiple Classes/Flexible Terms2-17
- [E][1] : Side Pockets2-17
- [E][2] : New Issues2-18
- [F] : Side Letters2-18
- § 2:4 : Offshore Hedge Funds2-20
- § 2:4.1 : Non-U.S. Investors2-21
- § 2:4.2 : U.S. Tax-Exempt Investors2-23
- § 2:4.3 : U.S. Taxable Investors2-24
- [A] : Passive Foreign Investment Company2-24
- [B] : Controlled Foreign Corporation2-25
- § 2:4.4 : Selecting an Offshore Entity and Jurisdiction2-26
- § 2:4.5 : Offshore Fund Terms2-28
- [A] : Partnership Approach Within a Corporate Structure2-29
- [B] : Equalization2-30
- § 2:5 : Complex Fund Structures2-30
- § 2:5.1 : Parallel Funds2-31
- § 2:5.2 : Master-Feeder Structure2-33
- § 2:5.3 : Mini-Master Fund2-35
- § 2:6 : Managed Accounts2-39
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Chapter 3: |
Rationale for Regulation | |
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- § 3:1 : Introduction3-1
- § 3:2 : Theoretical Underpinnings3-1
- § 3:3 : Market Integrity3-2
- § 3:4 : Investor Protection3-11
- § 3:5 : Self-Regulation3-15
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Chapter 4: |
Private Placement | |
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- § 4:1 : General Considerations4-2
- § 4:2 : Domestic Capital Raising4-3
- § 4:2.1 : Private Placements4-3
- § 4:2.2 : Regulation D4-4
- [A] : Accredited Investors4-4
- [A][1] : Natural Person’s Net Worth—Exclusion of Primary Residence4-7
- [A][2] : Natural Person’s Net Worth—Periodic Adjustments4-8
- [A][3] : Proposed Rule Changes4-9
- [B] : Non-Accredited Investors4-10
- [B][1] : Purchaser Representative4-11
- [B][2] : Counting Non-Accredited Investors4-12
- [C] : Disclosure Requirements4-12
- [D] : Manner of the Offering4-17
- [D][1] : Prohibition of General Solicitation or General Advertising4-17
- [D][2] : Accredited Investor-Only Exception4-21
- [D][2][a] : Verifying Accredited Investor Status4-22
- [D][2][a][i] : Principles-Based Method of Verifying Accredited Investor Status4-23
- [D][2][a][ii] : Non-Exclusive Methods of Verifying Accredited Investor Status of Natural Persons4-24
- [D][2][b] : Reasonable Belief4-26
- [D][2][c] : Interplay with Other Offering Requirements4-27
- [E] : Limits on Resales4-29
- [F] : Disqualified Offerings4-29
- [G] : Post-Sale Filing4-37
- § 4:3 : State Law Preemption4-44
- § 4:4 : Offshore Capital Raising4-46
- § 4:4.1 : Regulation S4-47
- [A] : Offshore Transactions4-47
- [B] : Directed Selling Efforts4-48
- [C] : Issuer Safe Harbor Categories4-50
- [C][1] : Category 14-50
- [C][2] : Category 24-52
- [C][3] : Category 34-52
- [C][3][a] : Offering Restrictions4-52
- [C][3][b] : Transfer Restrictions4-55
- § 4:4.2 : Simultaneous Onshore and Offshore Capital Raising4-55
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Chapter 5: |
Commodity Pools | |
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- § 5:1 : Commodity Pools5-1
- § 5:2 : Disclosure Document5-2
- § 5:3 : Reporting and Record-Keeping5-10
- § 5:4 : Exemptions from Disclosure, Reporting, and Record-Keeping Requirements5-11
- § 5:4.1 : Rule 4.12(b)5-12
- § 5:4.2 : Rule 4.75-13
- [A] : Qualified Eligible Persons5-14
- [A][1] : QEPs Who Need Not Satisfy Portfolio Requirements5-14
- [A][2] : QEPs Who Must Satisfy Portfolio Requirements5-16
- [A][3] : Portfolio Requirements5-18
- § 5:4.3 : Offshore Commodity Pools5-18
- § 5:4.4 : Electronic Filing5-20
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Chapter 6: |
Marketing the Manager | |
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- § 6:1 : Advertising6-1
- § 6:1.1 : Investment Advisers6-2
- § 6:1.2 : CPOs and CTAs6-5
- § 6:2 : Track Record6-6
- § 6:2.1 : Investment Advisers6-6
- [A] : Record Keeping6-6
- [B] : Actual and Model Performance6-7
- [C] : Unsolicited Requests6-10
- [D] : Prior Experience6-10
- [E] : Common Violations of the Advertising Rule6-11
- § 6:2.2 : CPOs and CTAs6-12
- [A] : Past Performance6-12
- [B] : Proprietary Trading Results6-16
- [C] : Hypothetical Results6-16
- [D] : Extracted Performance6-19
- § 6:2.3 : Global Investment Performance Standards6-19
- [A] : Fundamentals of Compliance6-21
- [B] : Input Data6-22
- [C] : Calculation Methodology6-23
- [D] : Composite Construction6-24
- [E] : Disclosure6-26
- [F] : Presentation and Reporting6-27
- § 6:3 : Use of the Internet6-28
- § 6:3.1 : Internet6-28
- § 6:3.2 : Social Media6-35
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Chapter 7: |
Marketers | |
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- § 7:1 : Broker-Dealer Status7-1
- § 7:2 : State Broker-Dealer Regulations7-7
- § 7:3 : FINRA Considerations7-8
- § 7:3.1 : Disclosure Standards7-8
- § 7:3.2 : Obligation to Conduct Reasonable Investigations7-10
- § 7:3.3 : Filing of Offering Documents7-11
- § 7:4 : Capital Introduction Services7-13
- § 7:5 : Solicitors7-13
- § 7:5.1 : Cash Solicitation Rule7-13
- § 7:5.2 : Pay to Play7-17
- § 7:5.3 : Lobbying7-25
- § 7:5.4 : Foreign Corrupt Practices Act7-26
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Chapter 8: |
Anti-Money Laundering Regulations | |
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- § 8:1 : AML Program Overview8-1
- § 8:2 : Investment Advisers and the BSA8-3
- § 8:2.1 : Investment Adviser Status8-4
- § 8:2.2 : FinCEN and SEC Examination Authority8-4
- § 8:2.3 : Investment Advisers As Financial Institutions8-4
- § 8:3 : AML Program Elements8-5
- § 8:3.1 : Establish and Implement Policies, Procedures, and Internal Controls8-6
- § 8:3.2 : Independent Testing8-7
- § 8:3.3 : AML Compliance Officer8-7
- § 8:3.4 : Training8-8
- § 8:3.5 : Other AML Considerations8-8
- § 8:4 : Investor Identification Procedures8-10
- § 8:4.1 : Nature of the Relationship Between the Fund and Its Investors8-11
- § 8:4.2 : Investor’s Location8-11
- § 8:4.3 : Nature of the Investor8-12
- § 8:4.4 : Nature of the Investment Activities8-13
- § 8:5 : BSA Requirements8-15
- § 8:5.1 : Suspicious Activity Reports8-15
- § 8:5.2 : CTR Filings8-19
- § 8:5.3 : Recordkeeping and Travel Rules8-19
- § 8:5.4 : Information Sharing8-20
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Chapter 9: |
Privacy Regulations | |
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- § 9:1 : Gramm-Leach-Bliley Act9-1
- § 9:2 : ISP Regulations9-5
- § 9:2.1 : FTC Regulations9-5
- § 9:2.2 : SEC Regulations9-7
- § 9:2.3 : CFTC Regulations9-11
- § 9:3 : Data Disposal Rules9-13
- § 9:4 : Identity Theft Red Flags Rules9-14
- § 9:4.1 : Financial Institutions9-14
- § 9:4.2 : Creditors9-16
- § 9:4.3 : Covered Account9-16
- § 9:4.4 : Elements of Red Flags Program9-17
- § 9:5 : State Privacy Regulation9-19
- § 9:6 : Cybersecurity9-20
- § 9:6.1 : SEC Guidance9-20
- § 9:6.2 : NFA Guidance9-26
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Chapter 10: |
Regulation of Private Investment Companies | |
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- § 10:1 : Avoiding Investment Company Status10-1
- § 10:2 : Section 3(c)(1) Funds10-3
- § 10:2.1 : The 100-Beneficial-Owner Requirement10-4
- § 10:2.2 : Knowledgeable Employees10-5
- § 10:2.3 : Involuntary Transferees10-8
- § 10:2.4 : Look-Through Rule10-9
- § 10:2.5 : Private Placement Requirement10-10
- § 10:3 : Section 3(c)(7) Funds10-11
- § 10:3.1 : Qualified Purchasers10-12
- § 10:3.2 : Knowledgeable Employees10-14
- § 10:3.3 : Involuntary Transferees10-14
- § 10:3.4 : Investments10-14
- § 10:3.5 : The Private Placement Requirement10-17
- § 10:3.6 : Numerical Limits on Section 3(c)(7) Funds10-17
- [A] : Securities Exchange Act Reporting10-17
- [B] : Publicly Traded Partnerships10-19
- [C] : Plan Asset Regulations10-20
- § 10:4 : The Interplay of Sections 3(c)(1) and 3(c)(7)10-20
- § 10:4.1 : Conversion10-20
- § 10:4.2 : Integration10-21
- § 10:5 : Combined Domestic and Offshore Fund Structures10-22
- § 10:6 : Commodity Pools10-24
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Chapter 11: |
Regulation of Registered Investment Companies | |
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- § 11:1 : Reasons for Registering11-1
- § 11:2 : Types of Registered Funds11-4
- § 11:3 : Raising Capital11-6
- § 11:4 : Tax Structures11-6
- § 11:5 : Fund Governance and Administration11-8
- § 11:6 : Fund Disclosures11-10
- § 11:7 : Investor Liquidity11-12
- § 11:7.1 : Closed-End Funds11-12
- § 11:7.2 : Open-End Funds11-13
- § 11:8 : Portfolio Management11-14
- § 11:8.1 : Investment Objectives11-14
- § 11:8.2 : Affiliated Transactions11-14
- § 11:8.3 : Leverage11-15
- § 11:9 : Valuation11-16
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Chapter 12: |
Investment Adviser Registration | |
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- § 12:1 : Introduction12-2
- § 12:2 : Bifurcated Regulation12-3
- § 12:2.1 : Eligibility for Federal Registration12-5
- [A] : Assets Under Management12-5
- [B] : Mid-Sized Advisers12-7
- [C] : Switching Between Federal and State Registration12-8
- § 12:2.2 : Eligibility for State Registration12-9
- § 12:2.3 : Exemption from Federal Registration12-10
- [A] : Private Adviser Exemption12-10
- [B] : Private Fund Exemptions12-11
- [B][1] : The Private Fund12-11
- [B][2] : Private Fund Adviser Exemption12-11
- [B][2][a] : U.S. Advisers12-12
- [B][2][b] : Non-U.S. Advisers12-13
- [B][2][c] : Private Fund Assets12-14
- [B][3] : Venture Capital Funds12-14
- [B][3][a] : Qualifying Investments12-15
- [B][3][b] : Limitation on Leverage12-17
- [B][3][c] : Redemption Rights12-17
- [B][3][d] : Venture Capital Strategy Representation12-18
- [B][3][e] : Private Fund Status12-18
- [B][3][f] : Grandfathered Funds12-19
- [B][4] : Exempt Reporting Advisers12-19
- [C] : Other Exemptions12-23
- [C][1] : Intra-State Exemption12-23
- [C][2] : CTA Exemption12-23
- [C][3] : Family Office12-23
- [C][3][a] : Family Clients12-25
- [C][3][b] : Family Member12-25
- [C][3][c] : Key Employees12-26
- [C][3][d] : Ownership and Control12-27
- [C][3][e] : Grandfather Provision12-27
- § 12:2.4 : Exemption from State Registration12-27
- § 12:2.5 : Jurisdictional Reach of Advisory Regulations12-28
- [A] : State Oversight12-28
- [B] : Federal Anti-Fraud Rule12-29
- § 12:3 : Offshore Managers12-32
- § 12:3.1 : Foreign Private Advisers12-32
- [A] : Clients12-33
- [B] : Private Fund Investors12-35
- [C] : In the United States12-36
- [D] : Assets Under Management12-36
- [E] : Holding Out12-36
- [F] : Adviser Lite12-37
- § 12:3.2 : Affiliation with Domestic Managers12-38
- § 12:4 : Registration Process12-42
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Chapter 13: |
Compliance | |
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- § 13:1 : Compliance Obligations13-2
- § 13:1.1 : Fiduciary Duty13-2
- § 13:1.2 : Substantive Prohibitions and Requirements13-7
- § 13:2 : Compliance Policies13-8
- § 13:3 : Chief Compliance Officer13-10
- § 13:4 : Code of Ethics13-15
- § 13:5 : Supervision13-20
- § 13:6 : Whistleblowers13-21
- § 13:6.1 : Definition of Whistleblower13-22
- § 13:6.2 : Payment of Award13-24
- [A] : Voluntary Provision of Information13-25
- [B] : Original Information13-25
- [C] : Information That Leads to a Successful Enforcement13-28
- [D] : SEC Action13-28
- § 13:6.3 : Interplay Between Whistleblower Regime and Compliance Policies and Procedures13-28
- § 13:7 : Contractual Requirements13-30
- § 13:7.1 : Compensation13-30
- § 13:7.2 : Assignments of Advisory Contracts13-31
- § 13:7.3 : Notification of Partnership Changes13-31
- § 13:7.4 : Hedge Clauses13-31
- § 13:7.5 : Termination Penalties13-32
- § 13:8 : Proxy Voting13-32
- § 13:8.1 : Proxy Voting Rule13-32
- § 13:8.2 : Proxy Advisory Firms13-36
- § 13:9 : Business Continuity13-37
- § 13:9.1 : Business Continuity Planning13-37
- § 13:9.2 : Transition Planning13-41
- § 13:9.3 : SEC Business Continuity Regulations13-42
- [A] : Business Continuity Plan Contents13-42
- [B] : Annual Review13-45
- [C] : Recordkeeping13-46
- § 13:9.4 : Other Regulatory Considerations13-46
- [A] : State Advisers13-46
- [B] : NFA Members13-47
- § 13:10 : SEC Examinations13-48
- § 13:10.1 : National Exam Program13-48
- § 13:10.2 : Exam Process13-50
- § 13:10.3 : Areas of Focus13-51
- § 13:10.4 : Presence Exams13-52
- § 13:10.5 : Handling an SEC Examination13-54
- § 13:11 : State Examinations13-56
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Chapter 14: |
Books and Records | |
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- § 14:1 : General Requirements14-1
- § 14:2 : Systemic Risk Information14-6
- § 14:2.1 : Records and Reports14-6
- § 14:2.2 : Form PF14-7
- [A] : Form PF Filers14-8
- [A][1] : Hedge Funds14-8
- [A][2] : Large Private Fund Advisers14-10
- [A][3] : Exempt Reporting Advisers14-10
- [A][4] : Aggregation of Assets Under Management14-10
- [B] : Frequency of Reporting14-11
- [C] : Information Required on Form PF14-12
- [C][1] : Section 114-12
- [C][2] : Section 214-13
- [D] : Forms CPO-PQR and CTA-PR14-14
- [D][1] : Form CPO-PQR14-14
- [D][1][a] : Form CPO-PQR Schedule A14-16
- [D][1][b] : Form CPO-PQR Schedule B14-16
- [D][1][c] : Form CPO-PQR Schedule C14-17
- [D][2] : Form CTA-PR14-18
- § 14:2.3 : Confidentiality of Records and Reports14-18
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Chapter 15: |
Custody | |
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- § 15:1 : Custody Rule15-1
- § 15:2 : Custody Defined15-2
- § 15:3 : Qualified Custodian15-3
- § 15:4 : Notices and Account Statements15-3
- § 15:5 : Surprise Examinations and Annual Audit Exception15-5
- § 15:6 : Internal Control Report15-7
- § 15:7 : Privately Offered Securities15-9
- § 15:8 : Special Purpose Vehicles15-10
- § 15:9 : Custody-Related Compliance Policies and Procedures15-12
- § 15:10 : Section 22315-13
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Chapter 16: |
Performance Fees | |
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- § 16:1 : Securities Law Considerations16-1
- § 16:2 : Tax Considerations16-4
- § 16:2.1 : Section 409A16-5
- § 16:2.2 : Section 457A16-8
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Chapter 17: |
State Advisory Regulation | |
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- § 17:1 : Introduction17-1
- § 17:2 : Registration17-2
- § 17:2.1 : The Adviser17-2
- § 17:2.2 : De Minimis Exception17-2
- § 17:2.3 : Adviser Representatives17-2
- § 17:2.4 : Regulation of the Adviser17-3
- § 17:2.5 : Relief from Multiple State Regulation17-3
- § 17:2.6 : SEC Oversight17-3
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Chapter 18: |
Commodity Pool Operators and Commodity Trading Advisers | |
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- § 18:1 : Commodity Pool Operator18-2
- § 18:2 : Commodity Trading Adviser18-3
- § 18:3 : Registration18-3
- § 18:4 : Exclusions and Exemptions from Registration18-6
- § 18:4.1 : Section 4.5 Exclusion from the Definition of Commodity Pool Operator18-6
- [A] : Section 4.518-6
- [B] : Harmonization with Investment Company Act18-10
- [B][1] : Disclosure Requirements18-10
- [B][1][a] : Delivery of Disclosure Document18-10
- [B][1][b] : Updating of Disclosure Document18-10
- [B][1][c] : Filing and Review of Disclosure Document18-11
- [B][1][d] : RIC Structures18-11
- [B][2] : Disclosures18-12
- [B][2][a] : Risk Statements and Legends18-12
- [B][2][b] : Risk Disclosure18-12
- [B][2][c] : Break-Even Analysis18-13
- [B][2][d] : Past Performance Disclosure18-13
- [B][2][e] : Fee Disclosure18-13
- [B][3] : Financial Reporting18-14
- § 18:4.2 : Exemptions from Registration As a Commodity Pool Operator18-14
- [A] : Section 4.13(a)(1) No Compensation Exemption18-14
- [B] : Section 4.13(a)(2) Small Operator Exemption18-14
- [C] : Section 4.13(a)(3) Limited Futures Trading Exemption18-15
- [D] : Family Office18-18
- § 18:4.3 : Exemptions from Registration As a Commodity Trading Adviser18-19
- [A] : Section 4.14(a)(4) and (a)(5) CPO Exemptions18-19
- [B] : Section 4.14(a)(8) Registered Investment Adviser Exemption18-19
- [C] : Section 4.14(a)(10) Private CTA Exemption18-20
- § 18:4.4 : Offshore Commodity Pools18-21
- § 18:4.5 : Exemption Notice Filings18-23
- § 18:5 : Compliance Obligations18-24
- § 18:5.1 : Supervision and Self-Audit18-24
- § 18:5.2 : Recordkeeping18-27
- § 18:5.3 : Reporting18-28
- [A] : Reports to Pool Participants18-28
- [B] : Quarterly Reporting to NFA18-30
- § 18:5.4 : Doing Business with Non-Members18-30
- § 18:5.5 : Ethics Training18-31
- § 18:5.6 : Business Continuity18-32
- § 18:5.7 : Sharing of Profits18-32
- § 18:5.8 : Prohibition on Loans18-33
- § 18:6 : NFA Audits18-35
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Chapter 19: |
Pensions | |
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- § 19:1 : Introduction19-1
- § 19:2 : Benefit Plan Investors19-2
- § 19:3 : The Plan Asset Regulations19-3
- § 19:4 : Fiduciary Status19-8
- § 19:4.1 : Definition of Fiduciary19-8
- § 19:4.2 : Fiduciary Duties19-15
- [A] : Duty of Loyalty19-15
- [B] : Prudent Man Rule19-16
- [C] : Diversification19-17
- [D] : Adherence to Plan Documents19-17
- § 19:4.3 : Party in Interest/Prohibited Transactions19-18
- § 19:4.4 : Liabilities and Indemnification19-19
- § 19:4.5 : Operational Considerations19-20
- [A] : Custody19-20
- [B] : Bonding19-22
- [C] : Reporting19-23
- [C][1] : Section 408(b)(2) Disclosures19-23
- [C][2] : Form 5500 Annual Reports19-27
- § 19:4.6 : Operating As an ERISA Fiduciary19-30
- [A] : Investment Advisers Act Registration19-31
- [A][1] : Investment Manager Status19-31
- [A][2] : QPAM Exemption19-31
- [A][3] : Service Provider Exemption19-34
- [A][4] : Performance Compensation19-34
- § 19:5 : Government Plans19-36
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Chapter 20: |
Banks | |
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- § 20:1 : Bank Holding Company Act20-2
- § 20:2 : Volcker Rule20-4
- § 20:2.1 : Hedge Fund Ownership and Sponsorship20-5
- [A] : Banking Entity20-5
- [B] : Covered Fund20-6
- [B][1] : Section 3(c)(1) and Section 3(c)(7) Funds20-7
- [B][2] : Commodity Pool20-8
- [B][3] : Foreign Covered Fund20-8
- [B][4] : Exclusions from Covered Fund Status20-9
- [C] : Acting As Principal20-11
- [D] : Ownership Interest20-12
- [E] : Sponsor20-13
- § 20:2.2 : Organizing and Offering a Covered Fund20-14
- § 20:2.3 : Ownership Limitations20-17
- [A] : Per-Fund Limitation20-19
- [B] : Aggregate Funds Limitation20-20
- [C] : Attribution of Ownership Interests20-21
- § 20:2.4 : Affiliated Transactions20-23
- § 20:2.5 : Foreign Banks20-25
- [A] : Investing in Non-Covered Funds20-25
- [B] : Foreign Fund Exemption20-25
- § 20:2.6 : Limitations on Sponsorship and Ownership20-31
- § 20:2.7 : Volcker Rule Compliance20-32
- § 20:3 : U.S. Bank Capital Rules20-37
- § 20:3.1 : Volcker Rule Capital Provisions20-37
- § 20:3.2 : Basel Capital Rules20-38
- § 20:3.3 : U.S. Basel Rules20-40
- [A] : Capital Ratio Implications20-41
- [A][1] : Financial Institution Exposure20-41
- [A][1][a] : Financial Institution20-44
- [A][1][b] : Deductions Related to Investments in the Bank’s Own Securities20-45
- [A][1][c] : Investments in Unconsolidated Financial Institution20-45
- [C][1][c][i] : Non-Significant Investments—10% Threshold20-45
- [C][1][c][ii] : Significant Investments—10% Threshold20-46
- [C][1][c][iii] : Significant Investments—15% Threshold20-46
- [A][1][d] : Corresponding Deduction Approach20-46
- [A][1][e] : Indirect Exposures20-47
- [A][2] : Risk Weighting of Asset20-47
- [A][2][a] : Traditional Securitization20-47
- [A][2][b] : Leveraged Hedge Fund/600% Risk Weight20-48
- [A][2][c] : Investment Funds/Look-Through Approaches20-48
- [C][2][c][i] : Full Look-Through Approach20-49
- [C][2][c][ii] : Simplified Modified Look-Through Approach20-50
- [C][2][c][iii] : Alternative Modified Look-Through Approach20-50
- [A][2][d] : Coordination with Numerator Considerations20-51
- [A][2][e] : Basel Final Policy Framework20-51
- [E][2][e][i] : Look-Through Approach20-51
- [E][2][e][ii] : Mandate-Based Approach20-52
- [E][2][e][iii] : Fall Back Approach20-52
- [E][2][e][iv] : Leverage Adjustment20-53
- [A][3] : Other Implications of Basel III20-53
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Chapter 21: |
Insurance Companies | |
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- § 21:1 : Investment Authority21-1
- § 21:1.1 : General Account and Separate Accounts21-1
- § 21:1.2 : Investments of the General Account21-2
- § 21:2 : Insurance Holding Company Systems Act21-3
- § 21:3 : Financial Statement Reporting and Risk-Based Capital21-4
- § 21:4 : Volcker Rule21-7
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Chapter 22: |
Registered Investment Companies | |
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- § 22:1 : Affiliated Transactions22-1
- § 22:2 : Public Disclosure22-2
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Chapter 23: |
Broker-Dealer Status and Relationships | |
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- § 23:1 : Introduction23-1
- § 23:2 : Broker-Dealer Status23-2
- § 23:3 : New Issues23-4
- § 23:3.1 : Rule 513023-4
- [A] : Definition of “New Issue”23-4
- [B] : Restricted Persons23-5
- [B][1] : Portfolio Manager23-5
- [B][2] : De Minimis Exemption23-6
- [C] : Carve-Outs23-7
- [D] : Compliance23-8
- § 23:3.2 : Rule 513123-9
- § 23:4 : Best Execution23-12
- § 23:5 : Soft Dollars23-15
- § 23:5.1 : Goods or Services Provided by the Broker23-17
- § 23:5.2 : Investment Discretion23-19
- § 23:5.3 : Good-Faith Determination23-19
- § 23:5.4 : Brokerage and Research Services23-20
- [A] : Research23-20
- [B] : Brokerage23-21
- [C] : Mixed-Use Items23-23
- [D] : Lawful and Appropriate Assistance23-24
- § 23:5.5 : Operating Outside the Safe Harbor23-24
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Chapter 24: |
Disclosures of Market Participation | |
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- § 24:1 : Introduction24-2
- § 24:2 : Sections 13(d) and 13(g)24-2
- § 24:2.1 : Section 13(d)24-2
- § 24:2.2 : Section 13(g)24-4
- § 24:3 : Decoupling of Shareholder Economic and Voting Rights and Section 13(o)24-7
- § 24:4 : Section 13(f)24-12
- § 24:5 : Section 13(h)24-12
- § 24:6 : Section 1624-19
- § 24:7 : Hart-Scott-Rodino Act24-23
- § 24:8 : State Anti-Takeover Statutes24-30
- § 24:9 : CFTC Reporting24-31
- § 24:9.1 : Large Trader Reporting24-31
- § 24:9.2 : Speculative Position Limits24-32
- [A] : Position Limits24-33
- [B] : Exemptions24-33
- [C] : Aggregation24-34
- [C][1] : Positions to Be Aggregated24-34
- [C][2] : Exemptions from Aggregation24-35
- [C][2][a] : Pool Participant Exemption24-35
- [C][2][b] : Owned-Entity Exemption24-36
- [C][2][c] : Exemption for Independent Account Controllers24-37
- [C][2][d] : Exemption for Information Sharing Restriction24-38
- [C][2][e] : Notice Filing for Exemptions24-38
- § 24:10 : Cross-Border Investment Reporting24-39
- § 24:10.1 : Direct Investments and Portfolio Investments24-40
- § 24:10.2 : BEA Reporters24-41
- § 24:10.3 : TIC Reporters24-42
- § 24:10.4 : BEA Reports24-42
- [A] : Surveys of U.S. Direct Investments Abroad24-42
- [B] : Surveys of Foreign Direct Investments in the United States24-45
- § 24:10.5 : TIC Reports24-47
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Chapter 25: |
Systemic Risk Regulation | |
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- § 25:1 : Introduction25-1
- § 25:2 : Financial Stability Oversight Council25-1
- § 25:3 : Nonbank Financial Company25-2
- § 25:3.1 : Supervision and Regulation of Certain Nonbank Financial Companies25-6
- § 25:3.2 : Prudential Regulation25-12
- § 25:3.3 : Reporting25-16
- § 25:3.4 : Orderly Liquidation25-19
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Chapter 26: |
Derivatives Markets Participants | |
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- § 26:1 : Introduction26-4
- § 26:2 : Regulatory Jurisdiction over Swaps26-4
- § 26:2.1 : Definition of Swap26-5
- § 26:2.2 : Definition of Security-Based Swap26-6
- § 26:2.3 : Definition of Mixed Swap26-6
- § 26:2.4 : Security-Based Swap Agreement26-7
- § 26:2.5 : Swap and Security-Based Swap Exclusions26-8
- § 26:3 : Clearing and Exchange Trading26-9
- § 26:3.1 : Clearing26-9
- § 26:3.2 : Exchange Trading26-15
- § 26:3.3 : Eligible Contract Participant26-18
- § 26:4 : Swap Dealers and Major Swap Participants26-18
- § 26:4.1 : Definition of “Swap Dealer” and “Security-Based Swap Dealer”26-18
- § 26:4.2 : Swap Dealers26-21
- [A] : Holding Out and Commonly Known As a Swap Dealer26-21
- [B] : Market Making26-22
- [C] : Ordinary Course of Business26-23
- [D] : Hedging Exclusion26-24
- § 26:4.3 : Security-Based Swap Dealer26-25
- § 26:4.4 : De Minimis Exception26-26
- § 26:4.5 : Definition of “Major Swap Participant” and “Major Security-Based Swap Participant”26-28
- § 26:4.6 : Registration26-35
- § 26:4.7 : Regulatory Capital and Margin26-40
- [A] : Swap Dealer and Major Swap Participant26-40
- [A][1] : Capital Requirements26-40
- [A][2] : Margin Requirements26-44
- [A][2][a] : Initial Margin26-48
- [A][2][b] : Variation Margin26-52
- [A][3] : Segregation26-54
- [B] : Security-Based Swap Dealer and Major Security-Based Swap Participant26-55
- [B][1] : Security-Based Swap Dealer Capital Requirements26-55
- [B][1][a] : Minimum Net Capital26-56
- [B][1][b] : Standardized Haircuts for Security-Based Swaps26-57
- [B][1][b][i] : CDS Security-Based Swaps26-57
- [B][1][b][ii] : Non-CDS Security-Based Swaps26-59
- [B][1][b][iii] : Commodity Positions and Swaps26-59
- [B][1][b][iv] : Credit Risk Charges26-59
- [B][1][b][v] : Risk Management26-60
- [B][1][b][vi] : Liquidity Stress Test26-61
- [B][2] : Major Security-Based Swap Participant Capital Requirements26-62
- [B][3] : Margin Requirements26-62
- [B][3][a] : Security-Based Swap Dealer26-62
- [B][3][b] : Major Security-Based Swap Participant26-64
- [B][4] : Segregation26-65
- § 26:4.8 : Reporting and Recordkeeping26-65
- [A] : Swap Dealer and Major Swap Participant Recordkeeping26-65
- [B] : Swap Data Recordkeeping and Reporting Requirements26-68
- [C] : Security-Based Swap Dealers and Major Security-Based Swap Participants26-74
- [C][1] : Recordkeeping26-75
- [C][2] : Reporting26-77
- [C][3] : Notification26-80
- [C][4] : Securities Count26-81
- [D] : Security-Based Swap Data Recordkeeping and Reporting Requirements26-81
- § 26:4.9 : Compliance Duties26-88
- [A] : Swap Dealer and Major Swap Participant26-89
- [A][1] : Risk Management26-89
- [A][2] : Monitoring of Position Limits26-91
- [A][3] : Diligent Supervision26-91
- [A][4] : Business Continuity and Disaster Recovery26-92
- [A][5] : Disclosure and Ability to Obtain Information26-92
- [A][6] : Antitrust Considerations26-93
- [B] : Diligent Supervision of Security-Based Swap Dealers and Major Security-Based Swap Participants26-93
- [C] : Chief Compliance Officer26-95
- [C][1] : Swap Dealers and Major Swap Participants26-95
- [C][2] : Security-Based Swap Dealers and Major Security-Based Swap Participants26-100
- § 26:4.10 : Business Conduct Standards26-102
- [A] : Anti-Fraud and Anti-Manipulation Regulations26-103
- [A][1] : Swaps26-103
- [A][2] : Security-Based Swaps26-107
- [B] : Verification of Counterparty Eligibility26-109
- [B][1] : Swap Dealers and Major Swap Participants26-109
- [B][2] : Security-Based Swap Dealers and Major Security-Based Swap Participants26-109
- [B][2][a] : Verification26-109
- [B][2][b] : Know Your Counterparty26-111
- [C] : Disclosure of Material Risks, Characteristics, Material Incentives, and Conflicts of Interest Regarding a Swap or Security-Based Swap26-111
- [C][1] : Swaps26-111
- [C][2] : Security-Based Swaps26-113
- [D] : Daily Mark26-114
- [D][1] : Swaps26-114
- [D][2] : Security-Based Swaps26-115
- [E] : Clearing26-116
- [E][1] : Swaps26-116
- [E][2] : Security-Based Swaps26-116
- [F] : Communications—Fair Dealing26-117
- [F][1] : Swaps26-117
- [F][2] : Security-Based Swaps26-118
- [G] : Recommendations to Counterparties—Institutional Suitability26-118
- [G][1] : Swaps26-118
- [G][2] : Security-Based Swaps26-120
- [H] : Swap Documentation Standards26-121
- [I] : Portfolio Confirmation, Reconciliation, and Compression26-123
- [I][1] : Portfolio Confirmation26-123
- [I][1][a] : Swaps26-123
- [I][1][b] : Security-Based Swaps26-125
- [I][2] : Portfolio Reconciliation26-126
- [I][3] : Portfolio Compression26-127
- [J] : Conflicts of Interest26-128
- § 26:4.11 : Special Obligations of Swap Dealers and Security-Based Swap Dealers Regarding Special Entities26-129
- [A] : Swap Dealers Acting As Advisors to Special Entities26-131
- [B] : Security-Based Swap Dealers Acting As Advisors to Special Entities26-133
- § 26:4.12 : Acting As Counterparties to Special Entities26-136
- [A] : Swap Dealers and Major Swap Participants Acting As Counterparties to Special Entities26-136
- [B] : Security-Based Swap Dealers and Major Security-Based Swap Participants Acting As Counterparties to Special Entities26-139
- § 26:5 : Hedge Funds As Counterparties26-141
- § 26:5.1 : Documentation26-141
- § 26:5.2 : Margin26-142
- § 26:5.3 : Reporting26-143
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Chapter 27: |
Trading | |
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- § 27:1 : Introduction27-2
- § 27:2 : Trading Transaction Exemption27-2
- § 27:2.1 : Rule 14427-3
- § 27:2.2 : Rule 144A27-10
- § 27:3 : Short Sales27-12
- § 27:3.1 : Brief History of the Short Sale Price Test27-13
- § 27:3.2 : Short Sale Price Test27-16
- [A] : Price Test Terminology27-17
- [B] : Price Test27-18
- [C] : Covered Securities27-19
- [D] : Pricing Increment27-19
- [E] : Circuit Breaker27-20
- [F] : Trading Center Policies and Procedures27-21
- [G] : Short Exempt Transactions27-22
- [H] : Exemptive Procedures27-23
- [I] : Overseas Transactions27-24
- § 27:3.3 : Determining Short Status27-24
- § 27:3.4 : Naked Short Selling27-26
- [A] : Locate Requirement27-26
- [B] : Anti-Fraud Rule 10b-2127-28
- [C] : Close-Out Requirement27-29
- § 27:3.5 : Section 16(c)27-31
- § 27:3.6 : Rule 10527-32
- § 27:4 : Insider Trading27-37
- § 27:4.1 : Insider Trading Under the Securities Laws27-37
- [A] : Elements of Insider Trading27-37
- [B] : Tippers and Tippees27-39
- [C] : Misappropriation Theory27-42
- § 27:4.2 : Regulation FD27-44
- § 27:4.3 : Section 204A—Insider Trading Policies27-45
- § 27:4.4 : Insider Trading Under the CEA27-46
- § 27:5 : Manipulation27-48
- § 27:5.1 : Securities Law Manipulation27-48
- § 27:5.2 : Manipulation Under the CEA27-50
- § 27:6 : Trade Errors27-54
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Chapter 28: |
Portfolio Management | |
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- § 28:1 : Introduction28-1
- § 28:2 : Principal Trades and Agency Cross Transactions28-1
- § 28:2.1 : Section 206(3)28-2
- § 28:2.2 : 25% Ownership Interest Principal Transaction Exclusion28-3
- § 28:2.3 : No Compensation Agency Transaction Exclusion28-4
- § 28:2.4 : Rule 206(3)-2 Agency Transaction Safe Harbor28-4
- § 28:2.5 : Cross Trading Under ERISA28-5
- § 28:3 : Trade Aggregation and Allocation28-8
- § 28:4 : Portfolio Valuation28-10
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Chapter 29: |
Structured Products | |
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- § 29:1 : Introduction29-1
- § 29:2 : Pass-Through Structures29-2
- § 29:3 : Principal Protected Notes29-3
- § 29:3.1 : Constant Proportion Principal Insurance29-3
- § 29:3.2 : Embedded Option Structure29-6
- § 29:4 : Collateralized Fund Obligations29-6
- § 29:5 : Portable Alpha29-11
- § 29:6 : Investable Hedge Fund Indices29-15
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Chapter 30: |
Hedge Fund Seeding | |
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- § 30:1 : Introduction30-2
- § 30:2 : Seeding Rationale30-3
- § 30:2.1 : Hedge Fund Manager30-3
- [A] : Reaching Critical Mass30-3
- [B] : Stability30-3
- [C] : Focus30-4
- [D] : Credibility30-4
- [E] : Institutional Quality30-4
- § 30:2.2 : Hedge Fund Seeder30-5
- [A] : Early Stage Returns30-5
- [B] : Longer Term Economics30-5
- [C] : Future Investment Opportunities30-5
- [D] : Customized Terms30-5
- § 30:3 : Preliminary Considerations30-6
- § 30:3.1 : Evaluating the Parties30-6
- § 30:3.2 : Structuring Considerations30-7
- [A] : Equity Ownership30-7
- [B] : Revenue Sharing30-7
- [C] : Deal Structure Considerations30-8
- § 30:4 : Capital Commitment30-8
- § 30:5 : Ancillary Services30-9
- § 30:6 : Seed Economics30-10
- § 30:6.1 : Management Fees30-10
- § 30:6.2 : Performance Fees and Allocations30-10
- § 30:7 : Fee Discounts30-11
- § 30:8 : Investment Capacity Rights30-11
- § 30:9 : Most Favored Nation Status30-11
- § 30:10 : Operational and Approval Rights30-12
- § 30:11 : Termination30-12
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Appendix A: |
Statutes and Regulations; and Appendices A1-A13 | |
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- Appendix A1 : Securities Act of 1933—Selected ProvisionsApp. A1-1
- Appendix A2 : Rules Under the Securities Act of 1933—Selected RulesApp. A2-1
- Appendix A3 : Securities Exchange Act of 1934—Selected ProvisionsApp. A3-1
- Appendix A4 : Rules Under the Securities Exchange Act of 1934—Selected ProvisionsApp. A4-1
- Appendix A5 : Investment Advisers Act of 1940—Selected ProvisionsApp. A5-1
- Appendix A6 : Rules Under the Investment Advisers Act of 1940— Selected RulesApp. A6-1
- Appendix A7 : Investment Company Act of 1940—Selected ProvisionsApp. A7-1
- Appendix A8 : Rules Under the Investment Company Act of 1940—Selected RulesApp. A8-1
- Appendix A9 : Employee Retirement Income Security Act of 1974—Selected Provisions, Regulations and Class ExemptionsApp. A9-1
- Appendix A10 : Hart-Scott-Rodino Antitrust Improvements Act of 1976—Selected ProvisionsApp. A10-1
- Appendix A11 : Commodity Exchange Act—Selected RulesApp. A11-1
- Appendix A12 : The Volcker RuleApp. A12-1
- Appendix A13 : Volcker Rule RegulationsApp. A13-1
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Index | |
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