| --- |
| title: "House Oversight: Estate Documents (Nov 12) (HOUSE_OVERSIGHT_019860)" |
| source: "House Oversight: Estate Documents (Nov 12)" |
| sourceUrl: "https://www.justice.gov/epstein" |
| date: "2026-01-01" |
| category: "House Oversight" |
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| --- |
| |
| THE QUESTION ON ALL OF OUR MINDS: WHAT |
| IMPACT WILL THE TRUMP ADMINISTRATION |
| HAVE ON THE HEDGE FUND INDUSTRY? |
| BY RON S. GEFFNER AND YEHUDA BRAUNSTEIN |
| Reprinted with permission of Hedgeweek |
| With the Trump administration in the White House, |
| regulatory uncertainty permeates the financial |
| services industry. While many on Wall Street are |
| very excited by the Trump presidency, others are |
| approaching this new era with trepidation. Presi- |
| dent Trump is unpredictable in many ways, and the |
| industry eagerly awaits his actions hoping that the |
| financial markets do not respond negatively and |
| create chaos in the global marketplace. |
| While we should expect that the Trump administration |
| will aim to cut back financial regulation implemented |
| during the last eight years, it is unrealistic to expect |
| that these laws will be eliminated in their entirety. |
| Though the financial markets have been extremely |
| volatile of late and react very swiftly upon the |
| announcement of any meaningful global news, vari- |
| ous aspects of recent financial regulation have been |
| positive for the industry. For example, the requirement |
| for many investment advisers to register with the U.S. |
| Securities and Exchange Commission ("SEC"), one |
| of the requirements of The Dodd-Frank Wall Street |
| Reform and Consumer Protection Act ("Dodd Frank") |
| which was signed into federal law by President |
| Obama to be effective as of July 21, 2010, in retro- |
| spect, has been viewed as a positive change within |
| the industry. Understandably, when initially intro- |
| duced in 2010, many asset managers located within |
| the United States and abroad that were required to |
| register as investment advisers with the SEC as a |
| result of Dodd-Frank were opposed to the changes. |
| However, many advisers, investors and regulators |
| now agree that requiring a larger number of advisers |
| to be accountable to higher regulatory standards has |
| created an environment where investors and coun- |
| terparties have more confidence in the oversight of |
| those managers and the industry as a whole. |
| It is also important to remember that any time |
| the government or a regulator changes the laws, |
| rules or regulations, those businesses affected |
| incur capital and opportunity costs in connection |
| with analyzing the changes in law and implement- |
| ing operational changes to comply with the new |
| laws. For example, when Dodd-Frank was origi- |
| nally enacted, at the time of registration, those |
| investment advisers that were required to register |
| as advisers with the SEC were required to adopt |
| written policies and procedures and invested capi- |
| tal into their operations and technology to support |
| compliance. Therefore, we expect that caution will |
| be exercised before significant change is made to |
| avoid the various costs associated with imple- |
| menting change. A case in point is the new DOL |
| Rule (discussed earlier in this newsletter), origi- |
| nally set to take effect on April 10, 2017. Invest- |
| ment advisers impacted by the DOL Rule, have |
| already been forced to analyze the DOL Rule and |
| its impact on their businesses, and some advisers |
| have already begun to implement changes to their |
| operations and procedures. The DOL Rule has been |
| the subject of much debate. While some industry |
| experts believe that the DOL Rule is onerous and |
| materially increases the costs associated with |
| providing services to clients, supporters of the |
| DOL Rule believe that it is necessary to protect |
| investors against brokers who are unnecessarily |
| selling high-fee investments to their clients. On |
| February 3, 2017, President Trump signed a memo- |
| randum to delay the DOL Rule by six (6) -months. |
| On March 1, 2017, the DOL issued a proposed |
| rule, which will extend the applicability date of its |
| fiduciary rule, including the Best Interest Contract |
| Exemption, from April 10, 2017 to June 9, 2017, a |
| 60-day delay. If the DOL Rule is ultimately modi- |
| fied or even eliminated, some advisers may have to |
| reverse their recently-implemented changes. |
| In conclusion, we do not believe that regulations |
| in the financial industry will be eliminated in their |
| entirety. For example, if the requirement to register |
| as an investment adviser with the SEC is materially |
| modified or no longer required, we expect that many |
| investment advisers would maintain their registra- |
| tion as it is perceived to be a competitive advantage |
| compared to those managers that are not registered. |
| While we expect the Trump administration to improve |
| the financial services industry by having more bal- |
| MARCH 2017 |
| 5 |
| anced regulations, we believe that this administration |
| will quickly realize that there are a lot of reasonable |
| and sensible regulations currently in place that are |
| working well, and that eliminating rules wholesale |
| can create chaos in the financial markets and may |
| come at a high price to their constituents. |
| Ron S. Geffner is a Partner and |
| Head of the Financial Services |
| Group of Sadis & Goldberg LLP. He |
| regularly structures, organizes and |
| counsels private investment vehicles, |
| investment advisory organizations, |
| broker-dealers, commodity pool operators and other |
| investment fiduciaries. Mr. Geffner also routinely counsels |
| clients in connection with regulatory investigations and |
| actions. His broad background with federal and state |
| securities laws and the rules, regulations and customary |
| practices of the SEC, Financial Industry Regulatory |
| Authority, Commodity Futures Trading Commission and |
| various other regulatory bodies enables him to provide |
| strategic guidance to a diverse clientele. He provides |
| legal services to hundreds of hedge funds, private |
| equity funds and venture capital funds organized in |
| the United States and offshore. Ron can be reached at |
| 212.573.6660, or at rgeffner@sg/lawyers.com. |
| Yehuda M. Braunstein heads up |
| the Family Office practice and is |
| also a member of the firm's Financial |
| Services and Corporate Groups. Mr. |
| Braunstein counsels family office cli- |
| ents in connection with all aspects of |
| their operations, including formation issues, governance |
| and compensation issues, transactional and day-to-day |
| matters, as well as compliance issues. Mr. Braunstein's |
| practice also focuses on investment funds, securities, |
| joint ventures and investment advisers. He regularly |
| structures and organizes hedge funds, private equity |
| funds (including real estate, distressed and lending |
| funds), funds of funds, separately managed accounts |
| and hybrid funds. Additionally, he advises private fund |
| managers on structure, compensation, employment and |
| investor issues, and other matters relating to manage- |
| ment companies. Mr. Braunstein also structures and |
| negotiates seed investments and operating agreements. |
| He provides ongoing advice to investment advisers on |
| securities law issues, including SEC filings. His practice |
| also involves counseling clients in SEC regulatory mat- |
| ters, including compliance issues related to registered |
| advisers, as well as conducting mock audits. Yehuda |
| can be reached at 212.573.8029, or ybraunstein@ |
| HOUSE_OVERSIGHT_019860 |
|
|
