S4:E9 | Private Fund Rules Finalized: Trick or Treat? – Lessons From The Front Lines | Compliance In Context
Welcome back to the Compliance in Context Podcast! On today’s show, we feature a Lessons From The Front Lines episode on the recently passed SEC Private Fund Adviser Rules with an esteemed panel of experts featuring three former regulators who served at the very highest levels of the SEC—Kristin Snyder, Dan Kahl, and Pete Driscoll. It’s no secret the SEC has been laser-focused on the private funds industry over the last several years, and now that the groundbreaking final rules have finally passed, our experienced panel will be able to arm you with some key questions and items to consider as you start to think about the overall impact to your firm and how to implement these changes into your firm’s compliance program. This is an episode you won’t want to miss!!
Show
Interview with Kristin Snyder (Debevoise & Plimpton LLP), Dan Kahl (Kirkland & Ellis) and Pete Driscoll (PwC)
What’s the biggest surprise from the proposed to the final rules?
What are the three conditions to achieve legacy status?
Breakdown of the Quarterly Statements Rule
Where did the SEC give on Prohibited Activities?
Breakdown of the Restricted Activities Rule
What did the SEC have to say about the standard of liability facing private fund advisers?
Breakdown of the Preferential Treatment Rule
What constitutes material economic terms?
When it comes to adoption, how can firms operationalize these new rules into their compliance programs?
What are some major challenges that firms face with regard to these rule proposals?
Quotes
10:36 – “There’s a lot unsaid in there and a lot of trepidation as to application in the future. The commission very clearly said it wasn’t going to address state law liability issues. But to me there are significant questions where the overlay of federal fiduciary standard and state law and what the staff’s views may be with respect to limitations of liability and how they address that. There was colloquy at the open meeting that this is no different than what the Commission did ago in fiduciary interpretation. But I think the devil will be in the details on application and the years to come on the pullback on the exculpation and whether it was actually meaningful or not.” – Dan Kahl
12:45 – “There are provisions that allow for legacy provisions to stand, but you really have to be careful in kind of unpacking exactly what is and isn’t covered by those legacy provisions because it’s not a blanket status that’s applied across the board.” – Kristin Snyder
20:52 – “And that’s what I’m hearing from clients is probably the biggest concern on how are we going to implement such a broad rule or series of rules, all the requirements–I mean, there’s five rules–frankly, and given the breadth of what’s included, the detail that needs to be captured needs to be automated on a quarterly basis. You mentioned quarterly statements and both you and Dan mentioned the operational lift. And that’s what I’m hearing from clients is probably the biggest concern on how are we going to implement such a broad rule or series of rules.” – Pete Driscoll
Resources:
Compliance in Context Contact Form
LinkedIn: Compliance in Context, NSCP
Twitter: @compliancepod
Websites: Compliance in Context, NSCP
