For Immediate Release July 20, 2011 Shannon Stone (785.296.5017)
TOPEKA, KANSAS – Thursday, July 21st, will mark the one year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act made significant changes to the regulation of investment advisers, and some of those changes were to go into effect on July 21, 2011.
For investment advisers with assets under management between $25 and $100 million, the Dodd-Frank Act requires the advisers to switch from federal oversight to state oversight. In addition, advisers to hedge funds and other pooled investment vehicles must now register with the Securities and Exchange Commission if their assets exceed $150 million, and smaller funds may have to register with the states unless they qualify for an exemption from state registration.
The federal government has struggled to make all of the changes that are necessary under the Dodd-Frank Act. For example, an electronic filing system is not yet ready to accommodate the filings that are necessary to register hedge fund advisers or switch advisers from federal to state registration. As a result, the S.E.C. has adopted rules that will delay implementation of these changes until the first half of 2012.
Kansas Securities Commissioner Aaron Jack said his office has been monitoring the developments at the federal level and will align its rules with the new federal timelines. Under this schedule, advisers will be required to calculate and report their assets under management in the first quarter of 2012, and those required to switch from federal to state registration will do so in the second quarter. In addition, Commissioner Jack entered a special order that gives advisers to private funds until March 30, 2012, to register if necessary. Before that date, the Commissioner will consider adopting a proposed model exemption for advisers to private funds.
According to the Commissioner, the adjustments being made at the state level will minimize confusion for investment advisers. “With all of the changes in financial regulation, it is difficult enough for advisers to keep up, and we don’t want to further complicate their lives by being inconsistent with our federal counterparts,” said Jack. He encourages any adviser or attorney with questions to contact his office for further information.