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SEC Registration & ADV Services
SEC RIA Licensing & ComplianceWe offer low cost Securities and Exchange Commission (SEC) registration services, ongoing SEC compliance services, and other legal services. We register U.S. and foreign investment advisers with the U.S. SEC. If you are not eligible for SEC registration you may have to register with your home state securities board. We also provide state investment adviser registration services. Learn About State Investment Adviser Registration In many states real estate fund managers are required to register as investment advisers. The SEC and many states allow performance fees to be charged only to qualified clients. Learn About Qualified Clients If you are not from the United States Click Here to read our landmark article about the advantages of registering as an investment adviser in the United States. Not only can you register with the U.S. SEC, you can also register as an investment manager in the British Virgin Islands (BVI), the Cayman Islands and St. Lucia--very helpful when home country options for investment management licensing do not exist. Contact Us For Assistance
Investment Advisers The Investment Advisers Act of 1940 regulates the activities of investment advisers. Learn More About Hedge Fund Law An "investment adviser" is "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities."
RIA Formation, SEC Registration & Compliance Investment adviser registration requires an understanding of the complexities of hedge fund and investment adviser law. Learn About Investment Adviser Law & Regulation We have extensive expertise in forming and registering start-up investment advisers with the SEC. We provide our RIA formation, registration and ongoing compliance services for a cost effective flat rate fee. Contact Us For Help Our services include:
Business Model Consulting
Business Model Consulting. We send you a questionnaire to gather information from you, review your investment approach, investment fees, and investment policies and other business decisions.
Business Model Planning. We have a telephone meeting to review your goals and investment business model.
Project Management Consulting
Project Management. We plan and management the registration process with the regulator and prepare the deliverables so that the registration can proceed as discussed. We send bi weekly status updates to you through email. We are always available by phone.
FINRA Entitlement Access. Obtain rights for the FINRA IARD and CRD Systems for regulatory filings and payment of fees. This will also assign you a Company Level CRD No.
FINRA System Configuration. We configure the IARD, CRD and E-Bill Systems with you so that you are the primary administrator and we are an alternate administrator.
Give guidance on the amount necessary to fund your firm’s IARD/Web CRD account to cover the registration and user fees that will initially be charged by the IARD/Web CRD and applicable securities regulators. We calculate the required regulatory fees and provide instructions to you for payment. We can also assist with making these payments upon your request.
We will research and validate applicable regulatory requirements for registration.
Serve as an IARD/Web CRD Service Bureau for your firm during the registration process and thereby electronically file applicable application documents on behalf of your firm.
Prepare and file the Form ADV Part 1A and Part 1B (online via the IARD System).
Prepare and file the Form ADV Part 2A and 2B (“Disclosure Brochure”).
Compliance Manual. We develop a Written Supervisory Procedures Manual (WSP) for your business. This is also called Policies and Procedures Manual.
Code of Ethics. We develop a Code of Ethics outlining your duty to your clients as required by law.
Business Continuity Plan. We develop your Business Continuity Plan (“BCP”) outlining how you will address continuation in the event of a business disruption or loss of key personnel.
Anti-Money Laundering Policy. We develop an AML Policy for your business as required by proposed federal law (pending).
Advertising Review. Review of your website, firm presentations and other client documents.
Email & Information Security Policy. Develop disclosures for your email signature.We develop an information security policy for your firm to address regulatory and cyber security concerns. The policy includes an inventory of your firm's technology infrastructure, security guidelines, user login and password management issues, and the use of antivirus software.
Supplemental Registration Requirements. We submit additional regulatory documents if requested by the regulatory. We serve as liaison with the SEC and/or state securities regulators regarding any questions associated with your firm’s application.
Correct any deficiencies identified by the SEC and/or state securities regulators.
Client Agreements. We prepare an Investment Advisory Agreement with an investment policy statement so that your firm meets SEC standards for advisory contracts.
Prepare the Form U4 (via Web CRD system) to register each Investment Adviser Representative. Verify Form U4 disclosures are consistent with Form ADV disclosures. Filing Form U4 triggers a notice to compliance of any active registration. Filings for IARs with material adverse financial, regulatory or criminal matters may be subject to additional fees due to the extra amount of time required.
SEC RIA Registration or State RIA Registration An investment manager with less than $25 million AUM needs to register with its state securities board unless an exemption from registration is available. You are considered a Small Adviser and prohibited from SEC registration. While certain states provide exemptions from registration, other states provide limited or no exemptions. If you have between $25 million and $100 million AUM and: (i) you are required to be registered as an investment adviser in the state in which you maintain your principal office and (ii) if registered, you would be subject to examination by the state securities board, you are not permitted to register with the SEC unless you are required to register in 15 or more states. In this case, a mid-sized adviser that is registered and examined by its home state mayopt for SEC registration. A mid-sized adviser not currently registered with the SEC is required to register only when its AUM equals or exceeds $100 million. An adviser that is registered with the SEC is only required to de-register if its AUM falls below $90 million. Contact Us For Assistance
State RIA Registration States generally require that advisors who are not SEC-registered but have more than a certain number of clients must register with the state as an RIA. The number of clients from each state that an advisor can have before needing to be registered with that state ranges from 0 to 15 but most states set the limit at 0 or 5. A Mid-Size Advisors who would be required to register in 15 or more states may opt to register with the SEC. Small Advisors with less than $25 million AUM and who are not SEC-registered must register in the state(s) in which they do business if they are required to under state law. Learn About State RIA Registration
Exempt Reporting Advisers (ERA) ERAs are investment advisers that are not required to register the SEC but must still pay fees and file a partial ADV in the IARD System. The two exemptions used to claim ERA status are the (i) Private Fund Adviser Exemption or (ii) Venture Capital Fund Adviser Exemption. If you are relying on either exemption, you must file within 60 days of claiming the exemption. Contact Us For Help
Private Fund AdvisersSection 203(m) of the Advisers Act provides an exemption from registration as an investment adviser for managers who exclusively advise private funds. An adviser may advise an unlimited number of private funds, but is not eligible for the exemption if it has one or more clients that are not private funds (such as separately managed accounts). A “private fund” includes Sections 3(c)(1) and 3(c)(7) funds under the 1940 Act. It also includes other funds that qualify for an exclusion from the definition of investment company under Section 3 of the 1940 Act in addition to Sections 3(c)(1) and 3(c)(7). An investment manager relying on this exemption must have aggregate assets of private funds below $150 million in AUM, calculated annually.
In the case of a non-U.S. firm, the exemption is available only as long as all of the manager’s U.S. clients are qualifying private funds. The number or nature of non-U.S. clients or assets does not affect the analysis. Only assets managed from the United States are counted toward the $150 million AUM threshold. Non-U.S. managers should also consider the Foreign Advisers Exemption (outlined below). In the case of a non-U.S. firm, the exemption is available only as long as all of the manager’s U.S. clients are qualifying private funds and the number or nature of non-U.S. clients or assets does not affect the analysis. Only assets managed from the United States are counted toward the $150 million AUM threshold. If a manager chooses to rely on the Private Fund Adviser Exemption, it will need to file as an exempt reporting adviser (ERA) with the SEC and will not need to be registered with any state. As a general matter, and if possible under applicable state regulations, managers often find it less burdensome to file as an ERA under the Private Fund Adviser Exemption than to be regulated by the state in which it operates.
Venture Capital Adviser Exemption A manager that advises solely venture capital funds, regardless of the number or size of the funds, may be exempt from SEC registration requirements if it can satisfy the “Venture Capital Fund Exemption” under Rule 203(l)-1 of the Advisers Act. A manager relying on this exemption would instead only be required to file as an ERA (as described above with respect to private fund advisers).To qualify for this exemption, each such fund must qualify as a “private fund” (i.e., a fund that would be an investment company under the 1940 Act but for the exemptions under Sections 3(c)(1) or 3(c)(7)); pursue a venture capital strategy; not exceed the 20% basket for “non-qualifying investments,” calculated as a percentage of the fund’s total commitments; not borrow, issue debt obligations, provide guarantees or otherwise incur leverage in excess of 15% of its capital commitments (which borrowing, indebtedness, guarantee or leverage is on a short-term basis only – non-renewable and not longer than 120 days); not offer investors redemption or other similar rights, except in extraordinary circumstances (such as withdrawal or excuse rights for legal or regulatory requirements); and not be registered as a U.S. registered investment company and not elect to be treated as a business development company. The 20% basket for non-qualifying investments, such as investments in bridge loans, publicly offered securities, leveraged buyouts or investments in other venture capital funds, is calculated immediately after the fund’s purchase of such investment. If a manager chooses to rely on the Venture Capital Fund Exemption, it will need to file as an ERA with the SEC.
When Must I SEC Register as an RIA? (1) you have $150 AUM million or more; (2) some of your clients are not hedge funds or private equity funds, and you have $100 million AUM or more; OR (3) some of your clients are not hedge funds or private equity funds, you have $25 million AUM or more and your principal office and place of business is in a state where either: (A) you are not required to register with the state securities regulator as an investment adviser; or (B) you are required to register with, but you are not subject to examination as an investment adviser by, the state securities regulator; OR (4) you act as an adviser to a registered investment company or a business development company, or you hold yourself out to the public in the United States as an investment adviser. If you have less than $25 million AUM you are prohibited from registering with the SEC and must register with state regulators unless an exemption applies.
Can I SEC Register as an RIA? The presumptive rule is that investment advisers must register with the SEC or one or more states and may not choose with whom they can register, subject to certain exceptions. However, you may register with the SEC if you are exempt from SEC registration (unless you are prohibited from registering) because: (i) you advise solely hedge funds and/or private equity funds (Private Fund Adviser) and have less than $150 million AUM; (ii) you advise solely venture capital funds; or (iii) are a foreign private adviser.
Foreign Private Adviser Exemption A foreign manager can seek to rely upon the “Foreign Private Adviser Exemption,” which applies if the manager meets all of the following conditions: has no place of business in the U.S.; has fewer than 15 clients and investors in the U.S. in private funds advised by the manager; has aggregate assets under management of less than $25 millionattributable to clients in the U.S., including U.S. private funds and U.S. investors in private funds advised by the manager; does not hold itself out generally to the public in the U.S. as an investment adviser; and does not advise registered investment companies or business development companies. For purposes of determining the number of clients/investors above, the non-U.S. manager would need to look through the fund in order to count the number of underlying investors. The exemption also includes a number of special rules for counting clients, such as the requirement to count clients even where no compensation is received by the manager. If the manager meets all of the conditions of this exemption, it is not required to register as an adviser with the SEC or to file as an ERA. The manager will need to continuously monitor its compliance with the exemption, however, which is why many non-U.S. managers typically elect to instead operate under the “Private Fund Exemption” and make the required ERA filing foreign private adviser may also be exempt from SEC registration.
Form ADV Annual Update Service You are required to file an annual update of your registration form (Form ADV) through the Investment Advisers Registration Depository (IARD). You must file an annual updating amendment to your Form ADV within 90 days after the end of your fiscal year. We offer low cost and ADV filing services. Contact Us For Help Within 120 days of its fiscal year end, an RIA must deliver to clients its updated Part 2A brochure and a summary of material changes to the brochure. Inaccurate, misleading or omitted Form ADV disclosure is a frequently cited deficiency in SEC examinations. Contact Us For Help
Form ADV Annual Update Service You are required to file an annual update of your registration form (Form ADV) through the Investment Advisers Registration Depository (IARD). You must file an annual updating amendment to your Form ADV within 90 days after the end of your fiscal year. We offer low cost and ADV filing services. Contact Us For Help Within 120 days of its fiscal year end, an RIA must deliver to clients its updated Part 2A brochure and a summary of material changes to the brochure. Inaccurate, misleading or omitted Form ADV disclosure is a frequently cited deficiency in SEC examinations. An adviser must accurately calculate its regulatory assets under management (RAUM). Contact Us For Help
International Investment Advisers If you are licensed for investment management outside of your home country, you should have agreements in place between yourself and your offshore investment management company. In the United States, an investment adviser is an investment manager as there is no legal distinction between the two services. However, there is legal distinction between “investment manager” and “investment adviser” in most other countries. If you live in a country where a such a distinction exists, position yourself through a set of contracts as a consultant or advisor to your offshore investment manager. Such "advisory" or "consultancy" services are not regulated business activities. When the contracts are properly prepared you will be able to control the timing, tax character and amount of taxable income reportable in your home country. You may also need third-party (i.e., “outside”) directors to ensure that the tax and regulatory mechanisms are respected for home country tax and regulatory purposes. Contact Us for Assistance
Set Up a U.S. Hedge Fund Manager In the United States, companies can be formed in minutes and a U.S. visit is not required. Learn More About U.S. Company Formations Note that you can use the hedge fund management company not only to serve as the fund’s investment manager, but also to operate a managed account business (i.e., unlike a hedge fund, managed account customer money is not pooled).
Virtual Office Arrangements When setting up a hedge fund manager outside of your home country (or state) and seeking tax deferral, arrange for a “virtual office” so that you have both a working and physical address outside your home country (or state). These arrangements allow you have to a hedge fund manager based in another part of the world with few, if any, regulatory barriers to hedge fund management. We offer company formation services in the United States and Virtual Office Arrangements in the British Virgin Islands, Delaware, Wyoming and in Florida. Contact Us for Assistance
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