Fund Compliance
39 Posts
Ask about fund compliance issues, including know your customer (KYC), anti money laundering (AML), and global fund requirements. The data set has worldwide regulatory insights from experts with tips from the community.
What are the reasons that lead a country to be on that list and what happen to the citizen of a blocked countries?
In the US, does the law precise all the reasons leading a foreign country to be on the list of blocked countries?
How the list of Specially Designated Nationals and Blocked Persons is created?
Hi,
In the compliance policy, how the list of Specially Designated Nationals and Blocked Persons is created? What are the criteria to meet to be on that list?
Thank you Natacha
Can LPs dismiss the GP for poor performance? If so, what is the process?
The GP has full control over investment decisions, portfolio management, fund operations, etc. while LPs remain passive investors, relying on the GP to execute the strategy. Based on the LPA, how can LPs hold the GP accountable for poor performance or misconduct that is not related to a Conflict of Interest?
What does the Clawback provision mean in practice?
For example, how is the "Excess Amount" calculated, when is repayment due, etc.
how do i clear AML checks for a US citizen with a FinCEN ID but a very common name that matches 56 people who are on various watchlists ?
It seems impractical to go through each of the 56... many of these watchlists lack identifying info such as birthyear or photo... ?
Auto generating first draft of the legal documents
Would there be a functionality within the Decile Hub to auto generate the first draft of some of the key legal documents, such compliance policy or valuation policy, related to the venture capital deals?
General Solicitation - after close of the Fund
I understand GP can talk about the Fund thesis publicly after the fund is completely closed.
What is the case when Fund 1 and Fund 2 thesis are the same and GP will be starting to raise Fund 2 soon?
What is the best procedure for offering deal flow directly to LPs? Not co-investments -- but good deals that don’t fit the fund thesis.
Decile Base’s answer goes into... set up an SPV, watch out for conflicts, be sure to offer to all LPs, use your LPAC.
All good. But I’d like to know how to specifically avoid conflicts of interest while introducing LPs to a deal we passed on (no SPV, no LPAC yet). This will be a regular occurrence.
template for cash control policy
Hello, we´re looking for templates for the following (couldn´t find any in Decile Base) policies:
• Cash control
• Privacy
• Valuation
• Cyber and info security
• Code of ethics & personal trading
• FCPA (anti-corruption & anti-bribery)
• Political contributions
Does an investors’ capital commitment change based on the completion of a capital call? Does the fund’s size (on the LPA) limit the maximum total capital investors can commit to the fund?
Question edited for clarity, and with respect to capital commitments and fund size terminology.
what are level 1, 2, and 3 investments with regards to valuation policy?
"The Valuation Policy has been prepared in the context of FASB Accounting Standards Codification Topic 820 (“ASC 820”), “Fair Value Measurements and Disclosures,” which has been adopted by General Partner for the purposes of valuing the Portfolio Investments of the Fund. ASC 820 requires that investments be classified as Level 1, 2, or 3 investments. It is anticipated that Level 3 investments will comprise the majority of the Fund’s Portfolio Investments. This Valuation Policy shall be reviewed on an annual basis."
In August, the SEC passed new policy for transparency I believe, does this impact our firms?
Excited to join VC Lab in the accelerator, in my preparation I came across recent policy change at the SEC. Does this impact our proceedings at all? Is this something that is already baked into the curriculum with VC Lab. Feel free to just share a link if you already have something written on the topic.
Delaware exemptions and reporting requirement for 3(c)(1) fund advisors
I understand a 3(c)(1) Qualifying Venture Capital Fund with <$10M in assets and <250 beneficial owners is exempt from reporting and registering with the SEC. However, if the ManCo and GP/LP are all domiciled in Delaware, are there still state-level registration and reporting requirements with the Delaware Securities Division since the fund advisor (i.e. ManCo & GP) is domiciled with a place of business in Delaware? It's my understanding that Delaware only has an exemption for 3(c)(7) fund advisors, not 3(c)(1) advisors (source).
A potential LP is a US based C-Corp owned entirely by a Canadian Limited Partnership company. The Onboarding questionnaire has the following question: "Who owns this entity? Please confirm the full legal name, date of birth, and city and country of residence of any individual who owns 25% or more of the entity you are using to invest.". My question is the LP should just inform that the Canadian Limited Partnership is the "owner"?
My question is the LP should just inform that the Canadian Limited Partnership is the "owner"? Or goes upstream ? What to answer if no individual has more than 25% of the Canadian LP?
Fund of Funds LP Look-Through
How do Fund of Funds get around the SEC look-through rules for investment companies? Say a FoF has 30-40 LPs and is structured as an LLC, wouldn't the SEC look through the fund entity and count each of the FoF investors as an investor in the fund? If so that would drastically reduce the number of investors they could have on their cap table.
Trademark / firm name check for BVI
For a crypto firm likely to domicile in BVI, is it recommended to validate the firm name by searching trademarks or similar business names registered only in BVI, or in other countries as well ?
How to answer LP questions about GPs not being required to be registered with OSC
I've been told that raising from accredited Ontario Canada investors would subject GPs to the OSC regs. Do I need to register with OSC before launching the fund? I've been told if I am representing myself as a fund and making buy and sell decisions, I'm filing in the role of an investment fund/portfolio manager, which apparently requires registration with the regulator. How do we not have to register with the OSC first before raising capital? Or talking to investors.
What is general solicitation?
What is general solicitation?
Can an aspiring fund manager speak as an individual instead of on behalf of a Fund (being raised) at a conference or event?
We are invited to a DEI in tech conference as a speaker and the organizer is asking me to speak as the MP of Axent Ventures about immigrant founders. We read the rules about General Solicitation. Shall we totally avoid pronouncing Axent and speak as “Guc” at the event? (event is backed by the state department)?
Can a fund manager (of a fund) be a venture partner for another fund without creating a conflict of interest?
Can we be the fund managers of our own fund and VPs of another (eg. portfolio VPs who simply refer in deals) or is this a conflict of interest?
If we have a podcast on VC can we mention that we are launching a fund or is that a no go?
If we have a podcast on VC can we mention that we are launching a fund or is that a no go?
A fund manager's friend wishes to join the fund (as another fund manager). However this friend is a Vice President-level employee at XYZ company, where XYZ company is in the same general sector as the fund's thesis. Is there any potential conflict of interest to be concerned about?
Conflict of interest??? I have a long time friend and mentor who I have known for 12 years and trust significantly. He is a technology VP level at United Health Group. He could be interested in the GP with me but he is concerned about conflict of interest being my fund is an AI fund focused on the healthcare sector. Is there any potential conflict of interest to be concerned about here? I do not think there is but please help me clarify. I suppose it would be up to him/UHG but wonder if you all can see any potential conflicts?
Can I promote my fund on podcasts with crossing the boundaries of general solicitation?
I host 2 podcasts where I have both listeners and guests who could be LPs and/or part of our deal pipeline. What's the best way to communicate my 'fund to be' without crossing any boundaries?
Is it okay to list yourself as a 'Managing Partner' on LinkedIn before your first close?
Is it okay to list yourself as a 'Managing Partner' on LinkedIn before your first close?
How do LPs feel about fund managers investing their personal money? What kinds of limits are there? What do LPAs usually say?
How do LPs feel about fund managers investing their personal money? What kinds of limits are there? What do LPAs usually say?
Once the fund is launched, are we good to advertise it and where?
Once the fund is launched, are we good to advertise it and where?
Can we share our fund's launch journey and VC Lab program participation on LinkedIn?
Are we allowed to share our journey to launching a fund and the fact that we are doing the VC Lab program on LinkedIn?
How can a fund manager politely reject excessive KYC documentation requests from a portfolio company's corporate secretary?
We have a portfolio company whose corporate secretary is making extremely exhaustive demands for documentation for KYC associated with our investment. We’re talking all our formation docs register of shareholders for the fund UBO details w/ passports photos various SG specific forms. Saying their compliance requires it. In probably 200 investments made I have never had to do this level of KYC. Only a couple ever asked anything. How do y’all handle these annoying requests? Any polite ways of rejecting them.