Ondo Finance’s Post

Engaging with moneycontrol.com, I discussed the SEBI's proposed changes to SSF norms, highlighting their importance in avoiding conflicts of interest. The new rules prevent SSFs from investing in associated companies, addressing SEBI's concerns about possible round-tripping and conflict of interest issues. This amendment, which substitutes 'associate' with 'related party,' effectively bars SSFs from directing investments into firms where they or their stakeholders might have a vested interest. Read full story here- https://shorturl.at/atwx5 #ssfnorms #sebi #Roundtripping #FinancialIntegrity #investmentfunds #lawfirm #funds #promoters

#Fees The U.S. Securities and Exchange Commission and Luxembourg financial supervisor Commission de Surveillance du Secteur Financier (CSSF) have jointly voiced significant concerns about “increasingly complicated #fee structures” in the #fundindustry, warning that these practices may be obscuring the true costs for investors. For #InvestmentOfficer from New York, Max Severijns reports from the ALFI - Association of the Luxembourg Fund Industry road show in the U.S.: https://lnkd.in/e-TfCqDV Addressing an audience of American lawyers and investment managers at the conference, Robert Shapiro, assistant director of the SEC’s #investmentmanagement division, said fund managers on both sides of the Atlantic are earning fees at multiple levels from their products or their funds, sometimes concealing the rationale behind them. The supervisors‘ concern applies mostly to the management of alternative investment funds, used widely for private equity, debt and real asset investments. #Luxembourg is home to more than 14,000 of such funds that are held by investors worldwide.

𝐒𝐄𝐁𝐈 𝐂𝐡𝐢𝐞𝐟'𝐬 𝐒𝐞𝐜𝐨𝐧𝐝 𝐘𝐞𝐚𝐫: 𝐄𝐦𝐩𝐡𝐚𝐬𝐢𝐬 𝐨𝐧 𝐓𝐞𝐜𝐡 𝐚𝐧𝐝 𝐃𝐚𝐭𝐚-𝐃𝐫𝐢𝐯𝐞𝐧 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐄𝐚𝐬𝐞   March 02, 2024 will mark beginning of third year of the term of Ms. Madhabi Puri Buch as the Chairperson of SEBI. The former SEBI Whole-Time Member assumed charge as the SEBI chairperson on March 02, 2022.   The Hindu Businessline has featured a story on her tenure so far and expectations ahead. Some of the commendable initiatives of the Chairperson during the second term includes move towards same-day settlement, introduction of micro, small and medium REITs, mandatory listing of non-convertible debentures by listed issuers, dematerialisation of AIF units and rules for social stock exchange, lesser processing time for applications, tech integration, ease of doing business, etc   In this background Mr. Sumit Agrawal, Managing Partner of Regstreet Law Advisors and former SEBI Officer, offered his insights to businessline follows:   "𝘐𝘯 𝘩𝘦𝘳 𝘴𝘦𝘤𝘰𝘯𝘥 𝘺𝘦𝘢𝘳, 𝘵𝘩𝘦 𝘧𝘰𝘤𝘶𝘴 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘰𝘯 𝘵𝘳𝘰𝘶𝘣𝘭𝘦𝘴𝘩𝘰𝘰𝘵𝘪𝘯𝘨, 𝘤𝘳𝘪𝘴𝘪𝘴 𝘮𝘢𝘯𝘢𝘨𝘦𝘮𝘦𝘯𝘵, 𝘢𝘯𝘥 𝘢𝘥𝘥𝘳𝘦𝘴𝘴𝘪𝘯𝘨 𝘭𝘦𝘨𝘢𝘤𝘺 𝘪𝘴𝘴𝘶𝘦𝘴, 𝘸𝘪𝘵𝘩 𝘯𝘰𝘵𝘢𝘣𝘭𝘦 𝘪𝘮𝘱𝘳𝘰𝘷𝘦𝘮𝘦𝘯𝘵𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘴𝘱𝘦𝘦𝘥 𝘰𝘧 𝘱𝘳𝘰𝘥𝘶𝘤𝘵 𝘢𝘯𝘥 𝘪𝘯𝘵𝘦𝘳𝘮𝘦𝘥𝘪𝘢𝘳𝘺 𝘢𝘱𝘱𝘳𝘰𝘷𝘢𝘭𝘴. 𝘚𝘸𝘪𝘧𝘵 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 𝘪𝘯 𝘭𝘪𝘴𝘵𝘪𝘯𝘨 𝘢𝘯𝘥 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘪𝘴𝘴𝘶𝘢𝘯𝘤𝘦 𝘯𝘰𝘳𝘮𝘴, 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘥𝘪𝘴𝘤𝘭𝘰𝘴𝘶𝘳𝘦 𝘰𝘧 𝘱𝘳𝘰𝘮𝘰𝘵𝘦𝘳𝘴’ 𝘧𝘢𝘮𝘪𝘭𝘺 𝘢𝘳𝘳𝘢𝘯𝘨𝘦𝘮𝘦𝘯𝘵𝘴 𝘩𝘢𝘴 𝘣𝘦𝘦𝘯 𝘢 𝘱𝘰𝘴𝘪𝘵𝘪𝘷𝘦 𝘴𝘵𝘦𝘱 𝘵𝘰𝘸𝘢𝘳𝘥𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳 𝘱𝘳𝘰𝘵𝘦𝘤𝘵𝘪𝘰𝘯”   Mr. Sumit Agrawal further says that “𝘛𝘩𝘦 𝘧𝘢𝘴𝘵-𝘱𝘢𝘤𝘦𝘥 𝘴𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘮𝘢𝘳𝘬𝘦𝘵 𝘥𝘦𝘮𝘢𝘯𝘥𝘴 𝘢 𝘥𝘦𝘭𝘪𝘤𝘢𝘵𝘦 𝘣𝘢𝘭𝘢𝘯𝘤𝘦 𝘣𝘦𝘵𝘸𝘦𝘦𝘯 𝘴𝘸𝘪𝘧𝘵 𝘥𝘦𝘤𝘪𝘴𝘪𝘰𝘯-𝘮𝘢𝘬𝘪𝘯𝘨 𝘢𝘯𝘥 𝘤𝘢𝘳𝘦𝘧𝘶𝘭 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘢𝘵𝘪𝘰𝘯. 𝘈𝘴 𝘵𝘩𝘦 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘰𝘳𝘺 𝘭𝘢𝘯𝘥𝘴𝘤𝘢𝘱𝘦 𝘦𝘷𝘰𝘭𝘷𝘦𝘴, 𝘪𝘯 𝘩𝘦𝘳 𝘵𝘩𝘪𝘳𝘥 𝘺𝘦𝘢𝘳, 𝘵𝘩𝘦𝘳𝘦 𝘪𝘴 𝘢 𝘱𝘳𝘦𝘴𝘴𝘪𝘯𝘨 𝘯𝘦𝘦𝘥 𝘵𝘰 𝘴𝘵𝘳𝘪𝘬𝘦 𝘢 𝘣𝘢𝘭𝘢𝘯𝘤𝘦 𝘣𝘺 𝘮𝘪𝘯𝘪𝘮𝘪𝘴𝘪𝘯𝘨 𝘦𝘹𝘤𝘦𝘴𝘴𝘪𝘷𝘦 𝘱𝘰𝘭𝘪𝘤𝘺 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 𝘢𝘯𝘥 𝘱𝘳𝘪𝘰𝘳𝘪𝘵𝘪𝘴𝘪𝘯𝘨 𝘵𝘩𝘦 𝘴𝘵𝘳𝘪𝘯𝘨𝘦𝘯𝘵 𝘦𝘯𝘧𝘰𝘳𝘤𝘦𝘮𝘦𝘯𝘵 𝘰𝘧 𝘦𝘹𝘪𝘴𝘵𝘪𝘯𝘨 𝘳𝘦𝘨𝘶𝘭𝘢𝘵𝘪𝘰𝘯𝘴 𝘵𝘰 𝘦𝘯𝘴𝘶𝘳𝘦 𝘴𝘵𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘢𝘯𝘥 𝘱𝘳𝘰𝘴𝘱𝘦𝘳𝘪𝘵𝘺 𝘪𝘯 𝘵𝘩𝘦 𝘴𝘦𝘤𝘶𝘳𝘪𝘵𝘪𝘦𝘴 𝘮𝘢𝘳𝘬𝘦𝘵”   The article also features the expert views of Mr. Paritosh Dhawan, Founder, Dhawan & Co.| Attorneys at Law; Mr. Kshitij Asthana of Singhania & Co. (S&Co.), Ms. Natasha Treasurywala, Partner at Desai & Diwanji and Mr. Jayant Thakur.   The businessline story can be seen as enclosed and is also accessible at: https://lnkd.in/gENj_vCx   Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com   #SEBI #regulator #chariperson #securitiesmarket

You may have missed it, but last Thursday there was big news on potential U.S. Securities and Exchange Commission regulation of #fundfinance instruments. As reported by Private Funds CFO (link to article in comments), an SEC Senior Examiner said that the SEC is eyeing the use by private funds of #fundfinance instruments including subscription lines and NAV facilities. A few major takeaways from the article: - The SEC has already been asking managers about their use of #fundfinance products, including whether they are permitted to enter into these facilities, how much financing they have, what is the collateral, and how it impacts fund performance/fees. - The SEC is checking whether the manager or the fund bears the costs for these facilities.  That is an easy question: if the borrower of the facility is the fund, then the fund bears the costs associated with the facility. The SEC is checking if those costs are capitalized into the investments or are a one-time expense to investors. - The SEC is checking for cross collateralization between funds. Cross collateralization in a single fund family is very typical and most LPAs expressly allow it.  Usually this is in the context of a subscription line where multiple feeder funds feed into a single master fund, but it could apply to other facilities as well. Increasing SEC oversight of the private funds industry, particularly its use of #fundfinance products, should raise concerns for #fundfinance participants. Since its inception, private funds #fundfinance has not been regulated by the SEC, and most of us probably want to keep it that way. The question of whether the SEC has authority to regulate the private funds industry is at the core of a lawsuit now pending before the 5th Circuit challenging recently enacted private funds regulations. See link in comments for more info. My view is that this SEC gambit into the #fundfinance market is an unnecessary overreach.  There is a very competitive market among managers for investor money, and most of the investors in these funds are sophisticated investors that know what issues to look for in the use of #fundfinance products. In addition, funds are represented by engaged industry trade groups like the Institutional Limited Partners Association (ILPA) that pay attention to these issues and advocate on behalf of institutional and other investors. Regulatory oversight of the #fundfinance industry will raise compliance costs for private funds (particularly smaller funds), raise costs for the use of #fundfinance products, and reduce flexibility and creativity in these products at a time when they are especially needed given the limited market for exits from private equity investments. Do you agree? Feel free to share your thoughts in the comments!

Law 8183’s impact on Luxembourg's investment funds toolbox - PART 2 📆 Another important change introduced by #Law8183 is the extension of the period within which investment funds must comply with their minimum capital requirements. Previously, the timeframe for reaching the minimum capital for SICARs, SIFs and RAIFs was 12 months, while for Part II funds, it was 6 months. However, in response to market demands, these timelines have now been extended: ▪ SICARs, SIFs and RAIFs now have 24 months (from CSSF approval/incorporation) to reach 1,000,000 EUR / 1,250,000 EUR (or equivalent in another currency) minimum capital. ▪ Part II funds have 12 months (from CSSF approval) to reach a minimum capital of 1,250,000 EUR. ▪ For UCITS, the timeframe remains 6 months from the date of approval by the CSSF. These updates are particularly beneficial for AIFMs engaged in illiquid strategies, giving them more time to meet regulatory capital requirements. Part 3 of this series will follow soon!

Here is a link to the Citywire version of the AIFMD story that Ed posted last week. This one goes into the topic in a bit more detail and also points to why spreads on trusts have widened https://lnkd.in/em4BxbYb

Karen Kerby's recent Financial Advisor article "New Private Funds: What RIAs Need To Know" is a must-read for RIAs looking to get up to speed with the latest developments in the industry. The article discusses new rules by the Securities and Exchange Commission (SEC) that would increase reporting requirements for private funds managed by registered investment advisors (RIAs). The rules aim to improve transparency and oversight of the private fund industry. Key Points include: • Seven new rules cover quarterly statements, audits, advisor transactions, and restricted activities - increasing transparency. • It aligns with the current Custody Rule on audits but may increase costs for some advisors. • The proposed "Safeguarding Rule" would further expand protections for client assets. Seek expert guidance to navigate changes and protect investor interests. Visit our site to learn how we can assist your firm and to read the complete article. https://lnkd.in/ey3fJt5E #yourworldworthmore

Big news coming down from the Fifth Circuit today! As stated below, the Silver Compliance team will be monitoring this development very closely as things continue to unfold, and we will be issuing additional guidance to our clients and industry colleagues as the SEC decides on next steps related to this decision. Meantime, please feel free to reach out to me directly via DM or at fkhan@silverreg.com to discuss how this news might impact your firm's compliance program now and into the future. #PFAR #SEC #privatefunds

I hope this update finds you well. I am excited to share a new blog post discussing SEBI's recent consultation paper on the "Introduction of Mutual Funds Lite Regulations (MF LITE) for passively managed Mutual Funds Schemes." The post explores the potential impact of the proposed introduction of hybrid index funds on investors. Read the full article here: https://lnkd.in/g8vJcBwK

Welcome back to “Fund Talk with Diego” ! When you are filing for a federal exemption when selling securities, RegD (Rule 506) is the most commonly used ! Care to know more?   Rule 506 has two different alternatives; b and c options   Rule 506b; -       You can raise an unlimited amount of capital. -       There is no limit to the number of accredited investors you can raise from. -       You can also raise from non-accredited investors up to 35 in a single offering, though they must have some level of investment sophistication/knowledge. -       You must have a legal disclosure such as a Private Placement Memorandum (PPM) if you accept non accredited investors. -       You must file Form D with the "Securities & Exchange Commission" (SEC) within 15 days of when the first investment becomes committed. -       No advertising or general solicitation is allowed. -       You must comply with Blue Sky Laws.   Rule 506c; -       The difference here is that advertising of the securities are allowed, but . . . you can only work with verified accredited investors. -       If you wonder what an accredited investor looks like, check out our previous posts !   Typically, issuers that are new at raising capital will start with Rule 506b. Since you cannot advertise your securities, they will always rely on their close network (ie. friends & family) for their raising needs. Once they build a proven track record, they then venture out to outsiders and switch to Rule 506c.   Next week, we will review RegD Rule 506d, the “Bad Actor” prohibitions.   If you find these posts informative, please “Like” and follow me every week at “Fund Talk with Diego”! #commercialrealestate, #syndications, #realestatefunds, #fundsetup, #capitalraising, #investors, #passiveinvestment, #privatelending