legal side of hedge funds.
Поступило пару предложений дать некую научно-популярную information about hedge funds from a legal point of view. Well, this very fulfilling a request, the more that the question for people interested in this kitchen is really interesting.
hedge fund industry was the most serious development in the country, the flagship of capitalism - the United States. Accordingly, the legislation governing concepts, principles of operation, and other provisions relating to hedge funds, namely the U.S..
the American sense, a hedge fund - it is usually private investment partnership that invests primarily in publicly traded securities or financial derivatives.
One of the main features U.S. hedge funds is that they are not subject to the Investment Company Act of the United States in 1940, requiring compliance with regulatory regime, and the Securities Act of 1933, obliging funds to register with the Securities and Exchange Commission (SEC). Thus, from the point of compliance with the regulatory regime and other rules relating to securities trading, hedge funds are in a more free-legal field compared to other market participants, and, in particular, with mutual funds. However, hedge funds have some limitations. Here are the key of them:
number of participants in the fund shall not exceed 100 investors;
stock fund should not be offered for free distribution;
participants Fund may be institutional investors and individuals with high income.
to institutional investors include banks, pension funds, insurance companies and other financial institutions with large volumes of assets.
Investors from the numbers of individuals must have net assets of not less than 1 million dollars or have an annual income of at least 200 000 dollars over at least the last two years. The size of the investee amount not to exceed 20% of net assets.
hedge fund, there are two types of partners: general partner and limited partners. General partner - A person who starts a hedge fund. It also has all the daily activities of the existing stock. Limited partners are his capital, but do not participate in trading and operational activities of the Fund. A typical form of organization of the General Partner - LLC (Limited Liability Company - Limited Liability Company) thus it is unlimited liability in the partnership. The limited partners of investment partnerships is responsible only to the extent of their investment in the partnership.
For all services rendered by the general partner receives incentive fee determined by the partnership agreement. Usually it is about 20% of net profit partnership. In addition, all appointed and an administrative fee, the amount of which usually amounts to 2 - 3% of net assets. Result activities of hedge fund is distributed among all the partners in proportion to their equity participation. All relationships are established Associates in detail in the partnership agreement, which is the most important part of any hedge fund.
As a hedge fund is a private investment partnership, U.S. Commission on Securities and Exchange Commission (Securities and Exchange Commission, SEC) limits the number of investors to 99, which can enter into it. In this case, at least 65 of them have have the status of "accredited". The status of "accredited" investor is defined by the criterion of net equity contribution, which has certain threshold. Its level can be very high and has a value of $ 1 million Given the fact that such investments are classified as risky, then "accredited" investor may need more prove the right to dispose of such amount, without prejudice to the family budget. In other words, give the necessary assurances that the million is not the last.
Offshore hedge funds - it's usually a mutual fund (mutual fund), resident in concessional tax areas, such as Bermuda. They are also available the same technology investments that hedge funds, so in that perspective, they are related. But, nevertheless, between them, there are some differences that are not always easily seen. Basically, it comes to income distribution from operations, the principles of entry and exit from the partnership, and transparency of performance of the business.
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