Member Article

Offshore investment advisers with more than 14 US resident investors (on a look through basis) have until 1 February 2006 to register with the U.S. SEC and become fully compliant with applicable SEC rules. Asian hedge fund managers are advised to take the following steps: • examine your firm’s client base and determine if you need to register (in particular, check the status of any of your fund of fund investors); • initiate steps by the end of the third quarter 2005 to become registered. Leaving it to the end of the year may be too late. In addition, managers should consider whether their fund documents need to be revised to enable them to monitor US investors and investments by private funds or US registered investment companies going forward. We would suggest that subscription forms should be amended to require investors (on a look through basis) to confirm that they are not US residents and to require fund of funds investors to confirm that they do not have any US holders or to disclose the number of such holders.