Since the last issue of our IM Update, we have also published the following separate Alerts of interest to the investment management industry:

California Attorney General Issues Guidance on Do Not Track

May 27, 2014

On May 21, 2014, California’s Attorney General issued new guidance on how web site privacy policies should handle “Do Not Track” (“DNT”) signals from browsers. In 2013, the California Legislature passed a tracking transparency bill, AB 370, which amended the California Online Privacy Protection Act (“CalOPPA”). AB 370 requires commercial website operators to inform users of how they respond to DNT browser signals. Many websites ignore those signals, though, and there is no common understanding as to what “Do Not Track” even means. This has led to a fair amount of confusion as to what regulators’ expectations were regarding compliance, which the guidance addresses.

AIFMD – What Actions Should Non-EEA Private Fund Managers Be Taking Now?

May 16, 2014

The Alternative Investment Fund Managers Directive (“AIFMD”), which governs alternative investment fund managers (“AIFMs”), required EU Member States (“Member States”) to implement the AIFMD into national law as of July 22, 2013. AIFMD was duly implemented by the majority of European Economic Area (“EEA”) Member States as of that date, with others implementing later or planning to implement at varying points this year. Following implementation, the transitional provision in the AIFMD has exempted many non-EEA private fund managers from compliance with the AIFMD until the transitional period ends on July 22, 2014.

CFTC Staff Updates Requirements for the Delegation of CPO Functions

May 14, 2014

On May 12, 2014, the Commodity Futures Trading Commission (“CFTC”) staff issued Letter 14-69 (the “Letter”), which requires that specific no-action relief be obtained when a commodity pool operator (“CPO”) of a private fund delegates its rights and obligations as a CPO to another entity that will serve as the registered CPO of the fund. The Letter institutes a streamlined approach to facilitate requests for no-action relief and supersedes the Staff’s prior guidance issued in August 2012.

Ropes & Gray LLP Joins Firms in Volcker Rule Interpretation on Parallel Fund Structure

May 6, 2014 This Alert discusses the consensus interpretation memorandum (prepared under the auspices of the Private Equity Growth Capital Council) which provides that the Volcker Rule should not require the integration of private funds offered and sold by non-bank sponsors to non-U.S. banking entities with parallel funds offered to U.S. investors.

Reminder Regarding Upcoming FATCA Deadline and Implications for Trading Agreements

April 30, 2014

This Alert discusses the July 1, 2014 effective date under the Foreign Account Tax Compliance Act (“FATCA”) for withholding agents to begin withholding on certain U.S. source payments made to foreign financial institutions (“FFIs”) and non-financial foreign entities (“NFFEs”). We note that the IRS has indicated in a recent notice that it will consider the extent to which an entity has made good-faith efforts to comply with FATCA’s requirements during the calendar years 2014 and 2015. 

SEC Staff Provides Guidance to Investment Advisers on the Use of Social Media

April 16, 2014

On March 28, 2014, the SEC’s Division of Investment Management published an IM Guidance Update to address concerns arising from the rating of investment advisers on social media websites featuring consumer reviews, such as Yelp and Angie’s List. This Alert discusses the IM Guidance Update and how the SEC staff interprets the testimonial rule in the context of the use of such social media by registered investment advisers.

2014 Mutual Funds and Investment Management Conference

April 9, 2014

This memorandum summarizes the 2014 Mutual Funds and Investment Management Conference sponsored by the ICI.

Segregation of Initial Margin Posted in Connection with Uncleared Swaps: Considerations for the Buy Side

April 7, 2014

This Alert discusses the form of notification and frequently asked questions recently published by The International Swaps and Derivatives Association (“ISDA”) regarding the segregation with a third-party custodian of any initial margin (also known as “independent amounts”) posted to the swap dealer in connection with uncleared swaps.