USA Law and Practice Contributed by: Bill Sturman, Matthew Holt, Steven Starr and Cliff Cone, Clifford Chance
AML Reporting FINCEN has issued final rules requiring SEC- registered advisers to establish a written anti- money laundering (AML) programme with com - pliance dates in 2026. Under the rule, advisers are required to, among other things, establish and implement policies, procedures, and inter - nal controls reasonably designed to prevent the adviser from being used for money laundering or the financing of terrorist activities and desig - nate a compliance person with responsibility for implementing and monitoring the operations and internal controls of the programme. Cybersecurity In March 2024, the SEC adopted amendments to Regulation S-P to enhance protection of non-public personal information collected by financial institutions. Specifically, the amend - ments require SEC-registered advisers to have procedures to assess the nature and scope of incidents involving unauthorised access or use of customer information, identify customer infor - mation systems and types of customer informa - tion accessed or used, take appropriate steps to contain and control an incident, notify each affected individual whose “sensitive customer information” was or is reasonably likely to have been accessed or used, and to oversee, monitor, and perform due diligence over vendors.
withholding tax on a gross basis at a 30% rate, which may be lowered by an applicable double tax treaty. The sale or exchange of shares of a RIC held for investment will generally result in a capital gain or loss (which will be long-term or short-term depending on the holding period of the seller). 4. Legal, Regulatory or Tax Changes 4.1 Recent Developments and Proposals for Reform Private Fund Adviser Rules In August 2023, the SEC adopted new rules and amendments that would have imposed sweeping reforms with respect to the regula - tion of investment advisers to alternative funds (the “PFA Rules”). The PFA Rules reflected the SEC’s increasing scrutiny of private fund advis - ers and the SEC’s desire to enhance protection of investors by increasing transparency, compe - tition, and efficiency in the alternative funds mar - ket. In June 2024, a decision from the US Court of Appeals for the Fifth Circuit struck down the PFA Rules in their entirety on the basis that the SEC lacked authority to adopt the rules. To date, there has been no indication from the SEC that it intends to revisit elements of the PFA Rules in rulemakings in the near future.
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