Private Fund Insights Blog

On Sept. 4, 2024, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published a final rule imposing new anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements on certain registered investment advisers and exempt reporting advisers. The final rule takes effect on Jan. 1, 2026. The requirements of the new rules are risk-based, and will require advisers to buyout, venture capital, real estate and other types of private funds to analyze the risks that their funds may be used in connection with illicit activities.

Registered investment advisers are subject to record-keeping requirements regarding certain written communications, and in the last several years, the U.S. Securities and Exchange Commission has increased enforcement efforts against “off-channel communications” (i.e., business-related communications on unapproved electronic devices and systems, such as texts) that it believes violate these requirements.¹ In a recent matter, on April 3, 2024, the SEC issued an enforcement action against Senvest Management LLC for violations of these rules and of Senvest’s own ...

On Aug. 23, the U.S. Securities and Exchange Commission adopted the PFA Rules, rules and rule amendments under the Investment Advisers Act of 1940 that impose new requirements and obligations on private fund advisers. In previous blog posts, we provided a brief summary of the PFA Rules, discussed the new quarterly reporting requirements, analyzed the impact upon adviser-led secondaries, examined the new restricted activities rule and considered the new preferential treatment rules. This post focuses on the application of the PFA Rules to existing private funds’ contractual ...