With the end of the year approaching, below is a brief summary of some of the significant year-end and beginning-of-the-year compliance items that investment advisers to private funds should be considering:
- Quarterly Form PF filing for advisers to “large” hedge funds. Advisers to “large” hedge funds (advisers with more than $1.5 billion in private fund assets under management) should remember to file their quarterly Form PF filing. For advisers with a December 31 fiscal year end, this means the next quarterly Form PF filing is due December 1, 2014.
- Annual audit of private funds. Advisers relying on the “audit” approach under the custody rule of the Investment Advisers Act should remember to (1) confirm their auditor is (a) registered with and subject to inspection by the PCAOB and (b) engaged to conduct an audit of their private funds and (2) provide copies of the annual audited financials to investors within 120 days of the end of the fiscal year. Advisers to fund-of-funds should provide such financials within 180 days. Please note the Securities and Exchange Commission (the “SEC”) recently brought enforcement action against an adviser for repeatedly providing significantly late audited financials to investors in the funds advised by such adviser.
- Form13F and Schedule 13D, 13G and 13F filings. In the beginning of 2015, advisers should remember to make their applicable 13H, 13D, 13G, and 13F filings and amendments thereto. 13H filings (which require disclosure of certain information by “large traders”) are due annually, within 45 days following the end of the calendar year and also must be promptly amended following the end of the calendar quarter in which any of the information contained in a Form 13H filing becomes inaccurate for any reason. Similarly, an adviser is required to promptly file an amendment to its Schedule 13D if there are any materials changes to their current filing. Schedule 13Fs and Schedule 13G amendments are due on February 17, 2015. As previously reported by Winston & Strawn, the SEC recently took enforcement actions against Schedule 13G and 13D filers as part of its “broken windows” approach to securities regulation enforcement, pursuant to which the SEC is striving to pursue every violation of the securities rules and laws no matter how small or minor.
- Quarterly transaction and annual holdings reports. Advisers also should confirm that their Chief Compliance Officer or other compliance personnel will be receiving and reviewing the applicable quarterly transaction and annual holding reports from the appropriate advisory personnel in accordance with the terms of the adviser’s code of ethics.
Please note that the above list is not exhaustive and highlights just a few of the compliance obligations advisers should be fulfilling.