H.R. 3383 – INVEST Act

Made In Order

Self #1 – Strikes section 307 relating to enhancing multi-class share disclosures
Self #2 – Modifies section 105 to clarify that the subsection may not be construed to authorize expenditures for additional full-time equivalent employees
Garcia (TX) #3 – Requires investment advisers and hedge funds to perform know-your-customer (KYC) verification and implement anti-money laundering (AML) procedures for foreign clients. This would effectively require foreign hedge funds to abide by the same rules as US-based hedge funds. This is modeled after a Financial Crimes Enforcement Network (FinCEN) final rule, aimed at combating illicit finance and national security threats in the investment adviser sector. The rule was ultimately withdrawn and did not go into effect
Waters #4 – Provides additional transparency and accountability for entities making exempt offerings under Regulation D via additional disclosure requirements on Form Ds, including the filing of Advance Form Ds, to include basic company identification and contact, as well as a certification that the information is accurate
Waters #5 – Defines and prohibits fees charged by SEC-registered individuals and entities that are not clearly disclosed or proportional to the services provided. Additionally requires SEC-registered entities and individuals to notify investors in advance of the fees they will be charged, and to report profits from fees to the SEC for publication on a public website, together with a ranking of how those fees compare with their peers