Private Fund Securities Law Exemptions: Navigating Accredited Investors, Qualified Purchasers and Qualified Clients

Evaluating Exemptions for Funds and Managers Under the Investment Adviser, Securities, Exchange and Investment Company Acts

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, September 13, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE program will discuss the exemption provisions of the Investment Adviser Act, Securities Act, Exchange Act and Investment Company Act that are relevant to private equity funds and venture capital funds. The program will provide an in-depth analysis of each of the exemption requirements, as well as the pros and cons of seeking exemption from registration under these Acts.

Description

In forming and operating private equity and venture capital funds, fund managers and the counsel that advise them must navigate a maze of regulations under the Securities Act, the Exchange Act, the Investment Company Act, and the Investment Advisers Act.

Funds seeking an exemption from registration requirements of the Securities Act must have a keen understanding of who are accredited investors, as well as the general solicitation and advertising rules under Reg D.

Exemption from broker-dealer registration is critical for partners and employees of private funds or their general partners. Funds seeking an exemption from the disclosure and reporting obligations under the Exchange Act must pay particular attention to the 499 investor limit, particularly with respect to master-feeder structures and parallel fund structures.

Exemption from the Investment Company Act requires funds to either limit their number of investors to 100 or exceed that number only if the fund is owned by “qualified purchasers.”

Fund managers that choose to register as investment advisers under the Investment Advisers Act must limit their investors to “qualified clients.” The two exemptions advisers can use to obtain exempt reporting status are the Private Fund Adviser Exemption and the Venture Capital Fund Adviser Exemption.

Listen as our authoritative panel of finance counsel discusses registration exemptions from the Investment Adviser Act, Securities Act, Exchange Act and Investment Company Act applicable to private equity and venture capital funds. The panel will provide an in-depth analysis of each of the exemption requirements, as well as the pros and cons of seeking exemption from registration under these Acts.

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Outline

  1. Securities Act of 1933
    1. Accredited investors
    2. General solicitation and general advertising
    3. Offerings Under Reg D
    4. Offshore offerings under Reg S
  2. Securities Exchange Act of 1934
    1. Issuer exemption from broker-dealer registration
    2. Investor limits
  3. Investment Company Act of 1940
    1. Qualified purchasers
    2. Less than 100 investors
    3. Funds owned exclusively by qualified purchasers
    4. Knowledgeable employees
  4. Investment Advisers Act of 1940
    1. Qualified clients
    2. Exempt Reporting Advisers

Benefits

The panel will review these and other key issues:

  • Why is it important for partners and employees of private funds to be exempt from broker-dealer registration?
  • Who are “qualified purchasers” under the Investment Company Act exemption that requires funds to be owned exclusively by qualified purchasers?
  • What benefits may fund managers enjoy by registering as investment advisers under the Investment Advisers Act?

Faculty

Daniel M. Baich
Daniel M. Baich

Of Counsel
Dorsey & Whitney

Mr. Baich handles all aspects of broker-dealer regulatory matters for various types of financial institutions. He also...  |  Read More

Genna Garver
Genna Garver

Of Counsel
Dorsey & Whitney

Ms. Garver chairs the firm's Investment Management practice. She has extensive experience representing...  |  Read More

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