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Pillsbury is hosting an event with the Association of Women in Alternative Investing (AWAI) on Wednesday, August 9, 2017.  Kathleen Dunlap, CEO of Girls Who Invest (www.girlswhoinvest.org) will be speaking about the GWI program and how it inspires and supports young women become tomorrow’s investment leaders. The program will also include some of the young women who are interning in San Francisco after participating in GWI.  Ildiko Duckor, co-head of  Pillsbury’s investment funds practice, will moderate the program.

Introduction by: Carol Jupiter, Member of the Steering Committee of AWAI

Moderated by: Ildiko Duckor,  Partner, Pillsbury Winthrop Shaw Pittman LLP

Speaker: Kathleen Dunlap, CEO, Girls Who Invest

The event will be held at Pillsbury located in 4 Embarcadero Center, Suite 2200, San Francisco, CA 94111.

To register please click HERE.

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On June 9, 2017, the Department of Labor (DOL) regulation updating the definition of “fiduciary” for purposes of ERISA became effective, along with a series of new and updated prohibited transaction exemptions.  The DOL regulation expands the types of activities that can give rise to fiduciary status, and applies not only to plans subject to ERISA but also to self-directed IRAs.  While the DOL is still reviewing whether changes should be made to the regulation to reduce the regulatory burden, and both the DOL and Congress are considering more drastic action such as full repeal, for the time being the regulation is in effect.

A broad reading of the definition of “fiduciary” under the new rule could cause investment fund managers to become fiduciaries to ERISA and IRA investors in their funds, and to prospective investors, regardless whether a fund they manage is a “plan assets” fund.  Fund managers may need to take action now, notifying benefit plan investors, obtaining representations and/or amending subscription applications.

Private investment funds that limit ERISA plan and IRA investments to below 25% of each class of equity interests (or that qualify as a Venture Capital Operating Company (VCOC) or a Real Estate Operating Company (REOC)) are still exempt from ERISA with respect to most of their activities—their investment transactions and compensation arrangements are exempt from ERISA’s fiduciary rules and from the prohibited transaction restrictions of ERISA and the Internal Revenue Code.  However, under the new DOL regulation, certain types of marketing and outreach activities to new and current benefit plan investors could be viewed as “recommendations” to invest in (or continue investing in) a fund, and thus may become subject to the new fiduciary rules.

Not every marketing or outreach activity will give rise to fiduciary status, and an exemption is available for communications with financially sophisticated plan fiduciaries.  Please contact us to discuss how you can qualify for an exemption from fiduciary status and/or take necessary other action with respect to IRA and ERISA investors.

For more detailed information about the DOL fiduciary rule, please read our Alert.

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The new EU data protection framework, called the General Data Protection Regulation (GDPR), will take effect in May 2018. These new laws will significantly impact any companies doing business in Europe, even those without a physical EU presence (e.g. U.S. companies targeting Europe). If you have a website, use customer or staff data or engage in almost any form of marketing you will likely be caught. The new very high fine levels for breaches and the need to be able to prove compliance mean companies, regardless of size, must take steps now to prepare.

If you would like to explore whether and how this law may impact you, please contact Pillsbury Partner Rafi Azim-Khan (Data Privacy Europe) or the investment management attorney you work with.

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In a press release today, The U.S. Commodity Futures Trading Commission (the “Commission”) unanimously approved a final rule amending Regulation 1.31.

The Commission is amending the recordkeeping obligations set forth in Commission regulations along with corresponding technical changes to certain provisions regarding retention of oral communications and record retention requirements applicable to swap dealers and major swap participants, respectively. The amendments modernize and make technology neutral the form and manner in which regulatory records must be kept, as well as rationalize the rule text for ease of understanding for those persons required to keep records pursuant to the Commodity Exchange Act and regulations promulgated by the Commission thereunder. The amendments do not alter any existing requirements regarding the types of regulatory records to be inspected, produced, and maintained set forth in other Commission regulations.

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Report of Foreign Bank and Financial Accounts now due on Tax Day, with auto-extension for six months.

Takeaways

  • US. citizens and resident aliens who have an interest in, or signature authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during the year are required to file a FBAR report with the Financial Crimes Enforcement Network (FinCEN).
  • In December 2016, FinCEN announced that the deadline for filing has been changed from June 30 to April 15 to coincide with the time for filing federal income tax returns (April 18 for 2017).
  • FinCEN has now granted filers who miss the new deadline an automatic six month extension (October 16, 2017).

READ MORE. . .

Read this article and additional Pillbury publications at Pillsbury Insights.

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Sam Pearse, a corporate and securities Partner from our London office and member of Pillsbury’s Investment Funds Group, will be visiting Pillsbury’s San Francisco office on April 3 and 4.

Sam has extensive experience advising asset managers on strategies regarding fund formation and fundraising in the UK and across the EU.  In particular, he has advised many US asset managers on how to navigate the complex fundraising regime within the European Union following the implementation of the Alternative Investment Fund Managers Directive, and the related investor and regulator disclosures.  As a member of Pillsbury’s Brexit team, Sam also has a good understanding of the likely landscape for asset managers in a post-Brexit world.

Sam also advises asset managers and investment advisors on the acquisition and divestment of assets, and the exercise of rights held by shareholders in UK listed companies.

If you would like to meet or speak with Sam whilst he is in San Francisco regarding your questions or concerns regarding any of the matters described above, please contact him at samuel.pearse@pillsburylaw.com.

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Pillsbury is hosting an event with 100 Women in Finance on Wednesday, March 1, 2017. Amanda Pullinger, CEO of 100 Women in Finance, and Diane Schrader, Board Member, will discuss the vision, maturity and growth of 100 Women in Finance.

The event will be held at Pillsbury located in 4 Embarcadero Center, Suite 2200, San Francisco, CA 94111.

To register for the event, please visit the 100 Women in Finance events page.

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The global compliance deadline for implementation of variation margin requirements for uncleared swap transactions is March 1, 2017.  Unless an exception is available, the rules generally require swap dealers to collect and post variation margin with no credit threshold.  The rules require the parties to enter into new or amended credit support documentation, limit the types of collateral that may be posted, prescribe minimum transfer amounts and effectively require new operational processes to be put in place.  Moreover, different rules can apply depending on who the swap dealer’s regulator is and/or the jurisdiction of the counterparty.  Not surprisingly, many market participants, particularly smaller financial firms, buy-side firms, asset managers, pension funds and insurance companies are unlikely to be compliant by the March 1 deadline.  This has caused immense consternation among buy-side market participants who feared that they would be unable to trade until they came into compliance.

On February 23, 2017, following requests from numerous trade associations, U.S. banking regulators and IOSCO, the umbrella body for global securities regulators, issued statements encouraging leniency in enforcement of the documentation requirements.  More specifically, the Federal Reserve provided guidance to examiners of CFTC-registered swap dealers that, except for transactions with financial end users that present “significant exposures” (which must still comply with the March 1 deadline), examiners should focus on swap dealer’s good faith efforts to comply as soon as possible but no later than September 1, 2017.   Similarly, though less explicitly, IOSCO issued a statement that, while it expects all parties to make every effort to meet the March 1 deadline, it believes that the global regulators should take “appropriate measures … to ensure fair and orderly markets during the introduction and application of such variation margin requirements.”   These statements follow the release by the CFTC on February 13, 2017 of a time-limited no-action letter delaying compliance by swap dealers under their jurisdiction until September 1, 2017.

There are a number of paths to compliance for buy-side firms, including negotiating bilateral agreements or amendments directly with swap dealers or using an industry-wide questionnaire-style protocol developed by ISDA and available through their ISDA Amend automated service run jointly with Markit.

If you have questions regarding the current deadlines or need assistance with compliance, please contact our derivatives partner, Daniel Budofsky (daniel.budofsky@pillsburylaw.com), or your regular Pillsbury contact.

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The following are some of the important annual compliance obligations investment advisers either registered with the Securities and Exchange Commission (the “SEC”) or with a particular state (“Investment Adviser”) and commodity pool operators (“CPOs”) or commodity trading advisors (“CTAs”) registered with the Commodity Futures Trading Commission (the “CFTC”) should be aware of.

This summary consists of the following segments: (i) List of Annual Compliance Deadlines; (ii) 2017 Enforcement Priorities In The Alternative Space; (iii) New Developments; and (iv) Continuing Compliance Areas.

Table of Contents

Page

Table of Annual Compliance Deadlines……………………………………………………………. 3

2017 Enforcement Priorities In The Alternative Space………………………………………. 5

New Developments………………………………………………………………………………………. 7

 

CONTINUE READING…

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On December 5, 2016, a Notice of reporting requirements was filed in the Federal Register by the U.S. Department of Treasury informing the public of the Treasury’s mandatory survey, due every 5 years, of ownership of foreign securities by U.S. residents as of December 31, 2016.  All U.S. persons who meet the reporting requirements must respond to, and comply with, this survey on Form TIC-SHC by March 3, 2017.

Who Must Report? 

i. Fund Managers and Investors.  U.S. persons who own foreign securities for their own portfolios and/or who invest in foreign securities on behalf of others (referred to as ‘‘end-investors’’), including investment managers and fund sponsors such as:

  • Managers of private and public pension funds
  • Hedge fund managers
  • Managers and sponsors of private equity funds, venture capital companies and similar private investment vehicles
  • Managers and sponsors of commingled funds such as money market mutual funds, country funds, unit-investment funds, exchange-traded funds, collective-investment trusts, and similar funds
  • Foundations and endowments
  • Trusts and estates
  • Insurance companies
  • U.S. affiliates of foreign entities that fall into the above categories.

These U.S. Persons must report on Form SHC if the total fair value of foreign securities—aggregated over all accounts and for all U.S. branches and affiliates of their firm—is $200 million or more as of the close of business on December 31, 2016.

ii.  Custodians. U.S. persons who manage, as custodians, the safekeeping of foreign securities for themselves and other U.S. persons (including affiliates in the U.S. of foreign entities). These U.S. persons must report on Form SHC if the total fair value of the foreign securities whose safekeeping they manage on behalf of U.S. persons—aggregated over all accounts and for all U.S. branches and affiliates of their firm—is $200 million or more as of the close of business on December 31, 2016.

iii.  Those Notified. U.S. persons who are notified by letter from the Federal Reserve Bank of New York. These U.S. persons must file Schedule 1, even if the recipient of the letter is under the reporting threshold of $200 million and need only report ‘‘exempt’’ on Schedule 1. U.S. persons who meet the reporting threshold must also file Schedule 2 and/or Schedule 3.

What To Report?

Information on holdings by U.S. residents of foreign securities, including equities, long-term debt securities, and short-term debt securities (including selected money market instruments).

How To Report?

Completed reports on Form TIC-SHC can be submitted electronically or mailed to the Federal Reserve Bank of New York, Statistics Function, 4th Floor, 33 Liberty Street, New York, NY 10045–0001. Inquiries can be made to the survey staff of the Federal Reserve Bank of New York at (212) 720–6300 or email: SHC.help@ny.frb.org.   Inquiries can also be made to Dwight Wolkow at (202) 622–1276, email: comments2TIC@do.treas.gov

When To Report?

The report must be submitted by March 3, 2017.

Additional information including technical information for electronic submission can be obtained from the Form SHC Instructions available here.