GAO Studies Feasibility of SRO for Investment Advisers to Private Funds

August 04, 2011

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the U.S. Government Accountability Office (“GAO”) recently released a study regarding the feasibility of forming a self-regulatory organization (“SRO”) to oversee investment advisers to private funds.   Click here for a copy of the study.

The GAO found that the general consensus is that “the formation of a private fund adviser SRO would require legislation” and would face challenges such as raising start-up capital and reaching agreement upon fees and structure.  The GAO noted that the advantages of a private fund adviser SRO included supplementing SEC’s oversight and capacity challenges; however, the GAO explained that even with a private fund adviser SRO, the SEC would still have to examine the majority of investment advisers, which do not manage private funds, and there could be regulatory gaps depending upon whether the investment adviser manages a private fund.

If your firm is a private fund adviser and needs assistance registering with the U.S. Securities and Exchange Commission (“SEC”) as investment adviser in accordance with the new requirements of the Dodd-Frank Act, please click  here to schedule an appointment with one of our senior compliance consultants to discuss our investment adviser registration services.

Posted by Bryan Hill
Labels: Private Funds, SEC, SRO