December 18, 2020 Alert

Hi all,

Below are this week’s alerts for the Investment Network.  This will be the last alert for 2020.  Wishing all members a happy and safe holiday season, and a Happy New Year in 2021!

This Issue’s Topics:

  • Client Alert: The CFTC’s New and Improved Form CPO-PQR: Navigating the Revised Form and Filing Landscape
  • OCIE Risk Alert: Observations from Examinations of Broker-Dealers and Investment Advisers: Large Trader Obligations
  • Client Alert: IRS Issues Final Regulations on Transportation Expenses
  • SEC Accounting and Disclosure Information: ADI 2020-11 Registered Funds’ Risk Disclosure Regarding Investments in Emerging Markets
  • ICI Webinar: The New SEC Rule on Funds’ Use of Derivatives
  • The Annual Women’s Alternative Investment Summit – Virtual
  • ACG Chicago: The Classic Market Trends Breakfast

Publications:

Stradley Ronon Client Alert: The CFTC’s New and Improved Form CPO-PQR: Navigating the Revised Form and Filing Landscape
December 15, 2020

At an open meeting held on October 6, 2020, the Commodity Futures Trading Commission (“CFTC”) unanimously adopted final amendments to Form CPO-PQR and CFTC Rule 4.27 designed to reduce reporting obligations of registered commodity pool operators (“CPOs”) under the form while maintaining the CFTC’s ability to oversee activities of CPOs and their operated pools. The amendments reflect the CFTC’s reassessment of the value and utility of information collected by Form CPO-PQR in light of lessons learned by the Commission since 2012, when the form was adopted, as well as the emergence of alternate, and in many respects superior, monitoring and data collection tools now available to the CFTC or in development.

To read more, click here.

OCIE Risk Alert: Observations from Examinations of Broker-Dealers and Investment Advisers: Large Trader Obligations
December 16, 2020

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) conducted a number of examinations that focused on broker-dealers and investment advisers compliance with Rule 13h-1. During these examinations, staff observed numerous instances of potential non-compliance with the Rule including where Large Traders may not have self-identified with the SEC and/or may not have filed their annual Form 13H as required by the Rule. The Rule requires entities and individuals, such as investment advisers, whose transactions in NMS securities meet or exceed the daily or monthly thresholds identified by the Rule to self-identify to the SEC on Form 13H, and also requires certain recordkeeping, reporting, and monitoring responsibilities for broker-dealers. The Risk Alert is intended to assist investment advisers and broker-dealers in reviewing and enhancing their compliance programs with respect to their Large Trader obligations.  The Risk Alert is also intended to remind broker-dealers of their regulatory reporting obligations related to the reporting of Large Trader information in Electronic Blue Sheets and their upcoming reporting obligations with respect to the Consolidated Audit Trail.

To view the full alert, click here.

Stradley Ronon: Client Alert: IRS Issues Final Regulations on Transportation Expenses
December 16, 2020

The IRS has issued final regulations (TD 9939) regarding the elimination of the deduction for certain employer-provided transportation and other fringe benefits. The 2017 Tax Cuts and Jobs Act (“TCJA”) amended Section 274 to disallow a deduction for the expense of any qualified transportation fringe (“QTF”). The TCJA also added Section 274(l), which provides that no deduction is allowed for any expense incurred for providing any transportation, or any payment or reimbursement, to an employee of the taxpayer in connection with travel between the employee’s residence and place of employment, except as necessary for ensuring the safety of the employee, effective for transportation and commuting expenses paid or incurred after Dec. 31, 2017. Section 132 generally excludes the value of such fringe benefits from the employee recipient’s gross income.

To read more, click here.

SEC Accounting and Disclosure Information: ADI 2020-11 Registered Funds’ Risk Disclosure Regarding Investments in Emerging Markets

A significant amount of U.S. investor exposure to emerging markets comes through funds investing in these markets. Accordingly, the SEC has closely reviewed filings of funds that invest significantly in emerging markets, identifying disclosure that notes the lack of publicly available information, restrictions on certain investments, the potentially higher risks for these investments than in companies subject to U.S. regulations, the lack of uniform disclosure, accounting and financial reporting and recordkeeping standards, and the limited investor protections applicable in other jurisdictions. This Accounting and Disclosure Information (“ADI”) is designed to highlight current findings from the staff’s ongoing review of funds’ emerging markets risk disclosure, bring more transparency to the SEC’s disclosure program with respect to investments in emerging markets, and drive improved risk disclosure for investors.

To read more, click here.

Events:

ICI Webinar: The New SEC Rule on Funds’ Use of Derivatives
January 21, 2020, 1:00-2:15 P.M. CDT

The SEC recently adopted a final rule and related amendments governing registered funds’ and business development companies’ use of derivatives. This webinar will review the new rule and discuss potential issues that funds, their boards, and their advisers may face when implementing the rule.

Specific topics will include:

  • New Rule 18f-4 and associated compliance requirements
  • The required value-at-risk measurements
  • The elements of the derivatives risk management program
  • Selecting and approving a derivatives risk manager
  • The limited derivatives user exception
  • New board responsibilities

For more information, click here

The Annual Women’s Alternative Investment Summit – Virtual
January 26-28, 2020

The Women’s Alternative Investment Summit is an annual high-level, content-rich event for women in private equity, venture capital, credit, real estate, real assets, and hedge funds: GPs, LPs, and the professionals who advise them. Now in its 13th year, the event is produced by Falk Marques Group, the organization behind the Women’s Private Equity Summit.

The Women’s Alternative Investment Summit is unique in its commitment to helping women build networks and to promoting the advancement of women in private equity, venture capital, and alternative investing in general. This event is specifically designed to help women advance to the next level of power in the finance industry through informative sessions and essential networking.

Due to the impact of COVID-19, in 2021 we will be holding two Women’s Alternative Investment Summits. The first takes place virtually over 3 half-days from January 26th – 28th, and the second is slated for New York City on November 11th and 12th, when we expect to have resumed in-person events. Both will feature moderated panel discussions, facilitated breakout conversations covering each asset class, and keynote dialogues followed by interactive Q&A sessions.

Attendees will have the unique opportunity to connect virtually in small networking groups and 1-on-1 meetings, to build trusted networks that provide access to raise funds, generate deals, manage the portfolio, realize exits, and advance your firm. This event attracts an influential and powerful inner circle to facilitate relationship-building, fundraising, and dealmaking opportunities and gain access to “hard-to-get” information.

For more information, click here.

ACG Chicago: The Classic Market Trends Breakfast
January 28, 2021, 7:45-10:30 A.M. CDT

Join us for a first-hand overview of trends that will drive middle market deal activity in 2021. This annual event, launched over three decades ago, draws hundreds of senior professionals. The program will begin with an economic overview by Brian Wesbury followed by a panel of seasoned professionals in the investment banking, private equity, debt capital and fund-raising markets who will share their insights and vision for 2021.  Sign-up now to reserve your spot and network with the country’s best in middle market deal making.

For more information, click here.

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