S. 1276 – Reading Mode

111th CONGRESS

1st Session

S. 1276

IN THE SENATE OF THE UNITED STATES

June 16, 2009

Mr. Reed introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To require investment advisers to private funds, including hedge funds, private equity funds, venture capital funds, and others to register with the Securities and Exchange Commission, and for other purposes.

Short title

This Act may be cited as the Private Fund Transparency Act of 2009.

Definition of foreign private advisers

Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended by adding at the end the following:

(29)

The term foreign private adviser means any investment adviser who—

(A)

has no place of business in the United States;

(B)

during the preceding 12 months has had—

(i)

fewer than 15 clients in the United States; and

(ii)

assets under management attributable to clients in the United States of less than $25,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this title; and

(C)

neither holds itself out generally to the public in the United States as an investment adviser, nor acts as an investment adviser to any investment company registered under the Investment Company Act of 1940, or a company which has elected to be a business development company pursuant to section 54 of the Investment Company Act of 1940, and has not withdrawn its election.

Elimination of private adviser exemption; limited exemption for foreign private advisers

Section 203(b)(3) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(b)(3)) is amended to read as follows:

(3)

any investment adviser that is a foreign private adviser;

Collection of systemic risk data; Annual and other reports

Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–4) is amended—

(1)

in subsection (a), by adding at the end the following: The Commission is authorized to require any investment adviser registered under this title to maintain such records and submit such reports as are necessary or appropriate in the public interest for the supervision of systemic risk by any Federal department or agency, and to provide or make available to such department or agency those reports or records or the information contained therein. The records of any company that, but for section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940, would be an investment company, to which any such investment adviser provides investment advice, shall be deemed to be the records of the investment adviser if such company is sponsored by the investment adviser or any affiliated person of the investment adviser or the investment adviser or any affiliated person of the investment adviser acts as underwriter, distributor, placement agent, finder, or in a similar capacity for such company.; and

(2)

adding at the end the following:

(d)

Confidentiality of reports

Notwithstanding any other provision of law, the Commission shall not be compelled to disclose any supervisory report or information contained therein required to be filed with the Commission under subsection (a). Nothing in this subsection shall authorize the Commission to withhold information from Congress or prevent the Commission from complying with a request for information from any other Federal department or agency or any self-regulatory organization requesting the report or information for purposes within the scope of its jurisdiction, or complying with an order of a court of the United States in an action brought by the United States or the Commission. For purposes of section 552 of title 5, United States Code, this subsection shall be considered a statute described in subsection (b)(3)(B) of such section 552.

Elimination of provision

Section 210 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–10) is amended by striking subsection (c).

Clarification of rulemaking authority

Section 211(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11) is amended—

(1)

by striking the second sentence; and

(2)

by striking the period at the end of the first sentence and inserting the following: “, including rules and regulations defining technical, trade, and other terms used in this title. For the purposes of its rules and regulations, the Commission may—

(1)

classify persons and matters within its jurisdiction and prescribe different requirements for different classes of persons or matters; and

(2)

ascribe different meanings to terms (including the term client) used in different sections of this title as the Commission determines necessary to effect the purposes of this title.