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    Jun. 19, 2025

Compliance Corner Q3‑2025: Regulatory Filings and Other Considerations Hedge Fund Managers Should Note in the Coming Quarter

This installment of the Hedge Fund Law Report’s quarterly compliance update highlights upcoming filing deadlines and reporting requirements fund managers should be aware of during the third quarter of 2025. ACA Group’s 2025 regulatory filings calendar, which is designed to help hedge fund managers stay on top of important filing obligations, is available here. This guest article by ACA Group consultants Luis Garcia, Grazia Gatti and Dan Campbell also includes information on recent SEC guidance that could expand investor access to private fund investing; relief on the application of federal securities laws to digital assets and finance; and updated FAQs for the recent Form PF amendments. For more from the ACA Group, see “ACA Compliance Testing Survey: Electronic Communications Displace Marketing As Top Concern” (Jan. 30, 2025).

SEC Crypto Roundtable: Potential Digital Asset Custody Models (Part Two of Two)

The newly created Crypto Task Force has been holding roundtable discussions on the regulatory treatment of digital assets. An April 25, 2025, roundtable on custody by investment advisers and investment companies focused on the challenges of complying with current Rule 206(4)‑2 – the Custody Rule – under the Investment Advisers Act of 1940. This second article in our two-part series covers potential digital asset custody models, as well as state trust companies and other entities as qualified custodians, with additional commentary from Justin L. Browder, partner at Simpson Thacher & Bartlett LLP, who also participated in the roundtable. The first article summarized the Commissioners’ remarks and reviewed the practical custody challenges discussed. See “SEC Commissioner Examines Regulatory Approach to Digital Assets” (May 6, 2021).

Advances and Challenges in “Retailization” of Alternative Investment Products

Private funds and alternative investment strategies have traditionally been off limits to retail investors. Many private fund managers would like the opportunity to tap the retail market for capital. Investment advisers and broker-dealers would welcome access to investment products that offer the prospect of higher returns. However, fitting complex and illiquid investment strategies into the rigid regulatory regime governing registered funds remains immensely challenging. A panel at Sidley Austin LLP’s Private Funds 2025 event examined the key challenges in giving retail investors access to alternative investments; demand for publicly traded alternative investment vehicles and strategies; and prospects for a more accommodating regulatory environment. The program featured Sidley partners W. Hardy Callcott, Benson R. Cohen and Nathan J. Greene; Smriti Kodandapani, deputy GC at First Eagle Investments; and Peter M. Sullivan, associate GC at BNY and chief legal officer at BNY Investments. This article synthesizes their remarks. See “A Look at the State of the Industry on the 75th Anniversary of the First Hedge Fund’s Launch” (Oct. 24, 2024).

SEC Denies Motion to Amend and Stay Settled Orders Over Off-Channel Communications

On April 14, 2025, the SEC issued an order (Order) denying motions made by 16 respondents (Respondents) in the hope of bringing about modifications and stays of settled orders against them over employees’ use of personal devices for business-related communications, i.e., off-channel communications, and related recordkeeping lapses. The Commission upheld earlier cease-and-desist orders against the 16 entities, keeping in place a range of compliance and reporting burdens imposed as part of an enforcement sweep against entities that failed to meet the SEC’s recordkeeping requirements. The motion was slightly atypical in that the Respondents argued that they were penalized more harshly than other firms caught later in the sweep. Commissioner Hester M. Peirce sympathized with them in her dissent, questioning the fairness of the settlements, especially given that the undertakings imposed on them would also have consequences for their FINRA membership. This article summarizes the settlements, the Respondents’ motions, the Order and Peirce’s dissent, and presents legal analysis of the decision and what it portends for regulatory enforcement in the coming months under new SEC leadership. See “Study Reports on Financial Industry Policies and Controls Around Electronic Communications” (Apr. 10, 2025).

Study Examines Market for Investments in Private Companies

In the first quarter of 2025, KPMG conducted a survey of 301 institutional investors that invest in private companies. Respondents included private equity, venture capital and hedge fund managers; family offices; and other asset managers. They manage portfolios ranging from $100 million to $300 billion and invest in varied sectors of the economy. The survey assessed the factors and metrics they consider when making investment decisions; key concerns and risks; the impact of technological advances; the impact of market position, competitive advantage and disruption; governance; cybersecurity; and sustainability. This article synthesizes KPMG’s findings. See “Study Finds Increasing Hedge Fund Interest in Digital Assets” (Mar. 13, 2025).

CLO Specialist Joins Schulte in New York

Schulte Roth & Zabel announced that Joseph Gambino has joined the firm as a partner in its finance practice. Based in the New York office, he brings more than two decades of experience in structured credit, with a particular focus on collateralized loan obligations and specialty finance transactions. For another recent addition to Schulte, see “Former CFTC Special Counsel Rejoins Schulte in D.C.” (Dec. 19, 2024).

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Women to Watch: Contributions, Achievements and Observations of Outstanding Female Professionals

To mark International Women’s Day, women editors and reporters at ION Analytics interviewed outstanding women in the industries and jurisdictions we cover. In this part, Law Report Group editors Jill Abitbol, Robin L. Barton and Megan Zwiebel profile notable women in data privacy, cybersecurity, private funds and anti-corruption law, including Anne-Gabrielle Haie, Jessica Lee, Micaela McMurrough, Laura Perkins, Amanda Raad, Madelyn Calabrese, Ranah Esmaili and Genna Garver. Enjoy reading their inspiring remarks here.