The SEC: Coming to a VC Near You?

PE Hub picked up on an interesting tidbit (login required) amid the ongoing rush to understand the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on venture capitalists and the startup community. While recent headlines have noted that venture capitalists would be exempt from registration under the Investment Advisors Act of 1940, the buried lead is that the new rules could require reporting, recordkeeping and compliance obligations upon even those “exempt” funds and, as Goodwin Procter partner Jonathan Axelrad suggests, raises the possibility of SEC examinations of those “exempt” funds. 

 Given the burdensome nature of preparing for examinations and the possible impact on venture capitalists and the related impact on the startup community, this blog will follow this rule making under the Dodd-Frank Tag.

For those unfamiliar, the proposed rules would exempt fund managers from registration so long as they met the so-called “VCF Exemption” described more fully in Goodwin Procter’s November 24, 2010 Client Alert, “SEC Releases Proposed Rules to Implement New Exemptions from Investment Advisers Act Registration and Other Aspects of Dodd-Frank.”

This post was authored by Ryan Sansom.

 
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