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Update: NFA Releases Effective Date(s) for Interpretive Notice Establishing Disclosure Requirements for Registered CPOs/CTAs Engaging in Virtual Currency Activities

On July 20, 2018, the National Futures Association (“NFA”) issued an interpretive notice (the “Interpretive Notice”) detailing new disclosure requirements for registered commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) to address certain risks stemming from the recent growth of the virtual currency and virtual currency derivatives markets.[1] On August 9, 2018, the NFA issued…

Client Alerts | August 16, 2018 | Hedge Funds

NFA Issues New Disclosure Requirements for Registered CPOs/CTAs Engaging in Virtual Currency Activities

On July 20, 2018, the National Futures Association (“NFA”) issued new disclosure requirements for registered commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) to address certain risks stemming from the recent growth of the virtual currency and virtual currency derivatives markets. The new requirements will require, among other things, CPOs and CTAs trading in…

Client Alerts | August 7, 2018 | Hedge Funds

SEC Regulatory Roundup: Best Execution, Pay-to-Play and Advertising Red Flags for Private Fund Managers

On July 11, 2018, the staff in the Office of Compliance Inspections and Examinations (the “Staff“) of the U.S. Securities and Exchange Commission (the “SEC“) issued a risk alert (the “Risk Alert”)[1] describing many of the most common best execution-related deficiencies cited by the Staff in recent examinations of investment advisers. In addition, on July…

Client Alerts | August 7, 2018 | Hedge Funds

Bankruptcy Court Tells Claims Traders: “Do Your Homework!”

Traders in claims of bankruptcy debtors should take note of a recent Delaware Bankruptcy Court decision that prevents the transfer of claims when the underlying debt instrument prohibited the transfer without the borrower’s consent. In In re Woodbridge Group of Companies, LLC, et al. No. 17-12560 (KJC), (Bankr. Del. June 20, 2018) (http://www.deb.uscourts.gov/sites/default/files/opinions/judge-kevin-j-carey/woodbridge-contrarian-opinion-and-order.pdf), the court…

Client Alerts | July 23, 2018

Game of Designations: Ninth Circuit Overturns Bad Faith Finding

A recent decision by the Ninth Circuit Court of Appeals, Pacific Western Bank v. Fagerdala USA – Lompoc, Inc. (In re Fagerdala USA – Lompoc, Inc.), strengthens the hand of creditors that seek to block confirmation of a cramdown plan by purchasing other claims, and may contribute to the liquidity of the market in bankruptcy debt.…

Client Alerts | July 9, 2018

Supreme Court Finds the SEC’s In-House Enforcement Proceedings To Be Unconstitutional: An Easy Fix

On June 21, 2018, the U.S. Supreme Court handed down its decision in Lucia v. Securities and Exchange Commission, finding that the SEC’s system of appointing administrative law judges (ALJs) by the SEC staff, rather than by the SEC commissioners themselves, is unconstitutional.   The case resolved a split between the U.S. Courts of Appeals for the…

Client Alerts | June 27, 2018 | Hedge Funds

NFA to Develop Swap Testing Program

On June 5, 2018, the Board of the National Futures Association (NFA) approved the development of a proficiency requirements program for “associated persons” (APs) of registered commodity pool operators (CPOs) and commodity trading advisors (CTAs) engaged in swaps activities. The proficiency program will be in the form of an online learning program with an embedded…

Client Alerts | June 14, 2018 | Derivatives | Hedge Funds

SEC Charges Thirteen Private Fund Managers with Form PF Filing Failures

On June 1, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced settlements with 13 registered investment advisers whom the SEC alleged had repeatedly failed to file required annual reports on Form PF over multi-year periods. [1]  SEC-registered advisers to private funds with $150 million or more in regulatory assets under management are required to…

Client Alerts | June 13, 2018 | Hedge Funds