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News January 9, 2012 Issue

Upcoming Compliance and Comment Deadlines

As the new year gets rolling, here are some first and second quarter deadlines to keep in mind.

January 23

First regular monthly Form SLT filings due to the Federal Reserve Bank of New York. Form SLT requires monthly reporting by U.S. funds and fund managers with $1 billion or more in assets under management of the fair values of holdings represented by long-term U.S. securities owned by foreign residents and long-term foreign securities owned by U.S. residents. Initial filings for the period ended September 30, 2011 were due October 23, 2011. The second filing, which is also the first regular monthly filing, is due January 23 for the period ended December 31, 2011. Reporting is due monthly thereafter on the 23rd day after every month-end.

February 13

Comments on the Volcker Rule and ABS Conflicts Rule proposals due.

February 14

Effective filing deadline for private fund advisers to file applications for registration. The deadline for advisers to be registered with the SEC is March 30. To allow the minimum 45-day review period typically required by the SEC prior to declaring a registration effective, registering advisers should file their application with the SEC through the Investment Adviser Registration Depository (IARD) filing system by February 14.

It can take several weeks to establish the IARD filing accounts that are required to submit and pay the fees associated with a registration application. (Translation: there’s no time like the present to get those accounts established.) The IARD system is maintained by FINRA. Go to http://www.iard.com/ to learn more and get the process rolling.

February 27

New net worth calculation for accredited investors takes effect.

March 30

Extended deadline for private fund advisers to be registered.

March 31

Form PF reporting requirement, embedded in Commodity Exchange Act Rule 4.27 and Advisers Act Rule 204(b)-1, becomes effective. Initial reports will be due as described below under June 15.

April 1

Compliance with a DOL interim rule issued pursuant to ERISA Section 408(b)(2) begins. Advisers must begin providing advance disclosures to plan fiduciaries about the services they provide and the compensation they receive.

Pursuant to a separate rule issued pursuant to ERISA Section 404(a), similar disclosures for plan participants are due 60 days after the effective date of the fiduciary-level fee disclosure rule or 60 days after the first day of the first plan year after November 1, 2011. The rule also requires that certain additional disclosures that must be provided to plan participants on a quarterly basis must commence 45 days after the end of the first quarter in which the initial disclosures are made.

April 30

Broker-dealers must have developed and implemented systems to monitor and report large trader activity by this date.

On deck:

June 15

Triggering date for Form PF quarterly filings by large fund advisers.

Large hedge funds with $5 billion or more in assets under management as of the last day of the fiscal quarter most recently completed prior to June 15, 2012, must file Form PF within 60 days after the first fiscal quarter completed after that date.

Large liquidity funds with $5 billion or more in assets under management attributable to liquidity funds and registered money market funds as of the last day of the fiscal quarter most recently completed prior to June 15, 2012, must file Form PF for the liquidity funds within 60 days after the first fiscal quarter completed after that date.

For funds with a fiscal quarter ending June 30, that would be an August 29 filing deadline.

Large private equity fund advisers are not subject to a quarterly filing requirement and are not included in this initial reporting round. Although June 15 is also a triggering date for these funds, large private equity funds with $5 billion or more in assets under management as of the last day of its first fiscal year occurring on or after June 15 must file Form PF within 120 days after that fiscal year end.

July 16

Over-the-counter swaps market compliance with certain Dodd-Frank Act amendments to the Commodity Exchange Act (CEA). Provisions relying on the promulgation of definitions for "swap," "swap dealer," and other related definitions will have until July 16 or no earlier than 60 days after definitions are adopted.

The delay of effectiveness for repealed exclusions from the CEA will expire July 16 and possibly earlier if the CFTC acts to shorten the period of delay.

Commercial market and board of trade transactions that are cleared and that are currently exempt will have until at least July 16 before the repeal takes effect.

On the radar:

Be on the lookout for adoption of a new net worth calculation for the performance fee rule. If adopted as proposed – and similar to the newly adopted net worth calculation for accredited investors – qualified clients will not be permitted to include the value of their primary residence in the calculation to meet the net worth threshold. Grandfathering provisions will be available if the final rule is adopted as proposed.

Also, DOL has said it intends to re-propose its definition of an ERISA fiduciary in early 2012.