Dodd-Frank put enormous pressure on the Securities and
Exchange Commission to create dozens of new rules. Tile IV of the law, the Private
Fund Investment Advisers Registration Act of 2010, shifts thousands of
mid-sized investment advisers from federal to state registration. It also
repeals the private adviser exemption, causing most private fund managers to
register with the SEC.
Section 419 of Dodd-Frank pegs the transition period at
one year. That means there is July 21, 2011 registration deadline. The SEC may
be bending on that deadline for the registration of private fund advisers.
In an April
8, 2011 letter to the president of the North American Securities Administrators
Association, the SEC indicated it may try to push back that July 21
deadline to the first quarter of 2012.
The letter states that the SEC intends to have the
necessary rulemaking done by July 21. Of course, that means the subjects of the
rules need to get in line. Since there is only three months until that
deadline, the clock is ticking very loudly.
The SEC also needs to get the computer systems in place.
Once the rules and forms are finished, they need to update the Investment
Adviser Registration Depository System. Back in November, the SEC proposed big
changes to the Part 1 of Form ADV to address these new registration and
reporting requirements. The final form has not been released. I thought the
release may have been because they were re-programming IARD to deal with the
new form, allowing them to release the final Form ADV and the registration at
the same time. According to this letter, that is not the case. The SEC does not
expect IARD to be re-programmed until the end of 2011.
Obviously, this letter merely indicates that at least one
person inside the SEC thinks the deadline could be extended. That is a long way
from actually extending the deadline. I still have a question about whether the
SEC can extend the deadline without some sort of legislative action.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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