How To Set Up a Hedge Fund


How To Set Up a Hedge Fund
Click here for Series 65 exam description and study materials

Hedge Fund and Limited Partnership Services

Hedge Fund – Limited Partnerships have unique compliance and organizational requirements. Clients are helped in identifying individual needs, and then provided customized services tailored to meet those needs. These customized services may include:


Start-up Requirements:

  • Identify federal and state Investment Advisor registration requirements of General Partner.
  • Prepare Form ADV; ensure consistency with offering material. Prepare Investment Advisor registration materials for all states, as required. Provide start-up files for registration documents.
  • Identify Blue Sky filing requirements of the investment vehicle. Prepare filings, or work with attorney, to ensure all filings are completed in a timely manner.
  • If appropriate, provide both ERISA and non-ERISA advisory agreements for separately manage accounts.
  • Assist professionals to schedule and prepare for required FINRA examinations, if required.
  • Train personnel in all aspects of day-to-day operations and the trading cycle — including placing trades, tracking settlements, reconciling broker statements, record keeping, and portfolio accounting. Establish effective filing systems for regulatory compliance in all areas.
  • Develop personal security transaction policy and insider trading policy based on existing trading practices; provide required regulatory documentation.
  • Review partnership agreement and offering material for compliance with investment advisor regulations and reasonable operational requirements.
  • Work with attorney to ensure that all partnership and corporate filings (if appropriate) are submitted to regulatory agencies in a timely manner.

Ongoing Support:

  • Respond to most compliance and organizational questions surrounding the investment advisory and hedge fund environments.
  • Provide compliance calendar and timely reminders of regulatory filing requirements; identify regulatory filing requirements for partnership and investment advisor in additional states; complete filings or provide assistance in preparation of filings.
  • Provide expertise in day-to-day portfolio accounting and trading issues; work with brokers (including prime broker) to establish accounts and good working relationships; work with bookkeepers and accountants to facilitate a smooth audit.
  • Review ongoing compliance with investment advisory and other regulatory requirements; review executed subscription agreements as received for compliance with offering material and regulations.

Refer to our Resources page for helpful links.


Exams:

Generally, the fund managers must register as Registered Investment Advisors — requiring a Series 65 exam or a combination of the Series 7 and 66 exams.

If the fund is going to trade commodity futures contracts, the Series 3 exam is often required.

Passing the exam is not the only step; you must complete the entire registration process and pass all exams before any solicitation begins.

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