The Exempt Offering Framework: Key Takeaways From the Concept Release for Private Fund Managers (Part Two of Two)

Under the Securities Act of 1933 (Securities Act), every offer and sale of securities must be registered with the SEC unless an exemption applies. The Securities Act itself contains a number of exemptions from registration, and over the years, statutes such as the Jumpstart Our Business Startups Act of 2012; Fixing America’s Surface Transportation Act of 2015; and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 have created additional exemptions. As a result of this patchwork development of exemptions, market participants have raised concerns about the exempt offering framework’s complexity. To address these concerns, the SEC recently published its Concept Release on Harmonization of Securities Offering Exemptions (Concept Release) as a device for reviewing the design and scope of the exempt offering rules. This two-part series examines the exempt offering framework and the Concept Release’s questions about that framework. This article discusses the key takeaways from the Concept Release for private fund managers. The first article summarized the elements of the Concept Release of particular interest to private fund managers. See “Seasoned Hedge Fund Lawyer and Industry Executive Discusses the Evolution of Laws Governing Private Fund Managers” (Aug. 1, 2019). To further explore the foregoing, on Thursday, October 3, 2019, at 1:00 p.m. EDT, the Hedge Fund Law Report will host a complimentary webinar, entitled “Focus on Private Funds: A Fireside Chat With SEC Commissioner Hester M. Peirce.” During the program, Robin L. Barton, Senior Reporter for the Hedge Fund Law Report, and Commissioner Peirce will discuss the Concept Release and other topics of interest to private fund managers, and Commissioner Peirce will also answer attendees’ questions during a Q&A session at the end of the webinar. To register for the webinar, click here.

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