Proskauer’s Private Investment Funds Group recently released its 2019 Annual Review and Outlook for Hedge Funds, Private Equity Funds and Other Private Funds. This yearly publication provides a summary of some of the significant changes and developments that occurred in the past year in the private equity and hedge funds space, as well as certain recommended practices that advisers should consider when preparing for 2020.
Highlights from the annual review include:
- A summary of SEC examination priorities and enforcement developments impacting the private funds industry, including a review of recent staff-level guidance, allocation of fees and expenses and conflicts of interest;
- A review of SEC policy and rulemaking initiatives, including the recent proposal to amend the Advisers Act’s advertising and cash solicitation rules and also the SEC’s Interpretation Regarding Standard of Conduct for Investment Advisers;
- An analysis of the current state of insider trading law, including analysis of both the “close personal relationship” requirement for tippee liability and a Second Circuit decision which held that forfeiture penalties for insider trading can include appreciation on trading funds;
- U.S. and UK tax updates, including an overview of the U.S. qualified opportunity zone program and an analysis of the ways in which the Organisation for Economic Co-operation and Development’s base erosion and profit shifting project is continuing to change the international tax landscape;
- An extensive review of employment law developments at the federal and state level potentially impacting advisers, including relevant sexual harassment and pay equity laws;
- A review of alternative data, including a review of the Ninth Circuit’s opinion in hiQ Labs, Inc. v. LinkedIn Corp., a ruling that is being hailed as a victory for web scrapers and the open nature of publicly available website data;
- Developments relating to cybersecurity and privacy law, including a review of the New York SHIELD Act and the California Consumer Privacy Act;
- Regulatory developments in the European Union, including an update on the still uncertain Brexit process and a review of the recently published changes to the rules relating to the pre-marketing of funds in the EU; and
- A comprehensive overview of required U.S. regulatory filings across the many agencies overseeing the private funds industry, including a quick reference table for monthly filings in 2020.