IMS tackles compliance for UK-based investment managers
10 August 2011 London
Image: Shutterstock
With US regulation compliance looming on the horizon, consultancy IMS Group has announced its service to help UK-based advisers and managers of private funds cope with the far-reaching reform.
The Dodd-Frank Act will mean that managers must apply to register with the Securities and Exchange Commission (SEC) by mid-February 2012 if they have more than $25 million of AUM attributable to US clients or if they have 15 or more US clients. If less than $150 million of private fund assets are managed from a location in the US, and this will apply to many UK-based managers, the firm may be eligible for Exempt Reporting Adviser Status (ERA), according to IMS Group.
ERAs would be required to submit and periodically update reports to the SEC over and above those required by UK regulator, the Financial Services Authority (FSA). As well, the SEC can require an inspection.
At a recent IMS conference, more than three quarters of some hundred delegates expressed concerns over a lack of preparedness for such new requirements. Delegates were drawn from the alternative investment industry - hedge fund managers, private wealth fund managers and private equity firms - with offices in the UK.
“Managers of private funds with US investors should start preparing for SEC oversight in some form,” said Jon Wilson, director of project consulting and head of the new service. “This could be adopting all of the typical rule requirements of a registered adviser or complying with US laws which they previously had not been subject to.”
IMS Group's service works by integrating compliance requirements from both the FSA and SEC.
The Dodd-Frank Act will mean that managers must apply to register with the Securities and Exchange Commission (SEC) by mid-February 2012 if they have more than $25 million of AUM attributable to US clients or if they have 15 or more US clients. If less than $150 million of private fund assets are managed from a location in the US, and this will apply to many UK-based managers, the firm may be eligible for Exempt Reporting Adviser Status (ERA), according to IMS Group.
ERAs would be required to submit and periodically update reports to the SEC over and above those required by UK regulator, the Financial Services Authority (FSA). As well, the SEC can require an inspection.
At a recent IMS conference, more than three quarters of some hundred delegates expressed concerns over a lack of preparedness for such new requirements. Delegates were drawn from the alternative investment industry - hedge fund managers, private wealth fund managers and private equity firms - with offices in the UK.
“Managers of private funds with US investors should start preparing for SEC oversight in some form,” said Jon Wilson, director of project consulting and head of the new service. “This could be adopting all of the typical rule requirements of a registered adviser or complying with US laws which they previously had not been subject to.”
IMS Group's service works by integrating compliance requirements from both the FSA and SEC.
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