The Emergency Economic Stabilization Act of 2008: Impact of the Historic New Law

The Emergency Economic Stabilization Act of 2008 (the “Act”) was signed into law by President Bush on October 3, 2008. Passage of the Act was the result of intense debate in both the U.S. Senate and the U.S. House of Representatives and among the American people. Debate was to be expected given the magnitude of the requested funds—$850 billion (including up to $700 billion for the purchase of troubled assets and up to $150 billion for the extension or expansion of a variety of tax breaks)—and the importance of the issues the Act addresses to an economy that has been experiencing severe stress from the fallout of the “subprime crisis” which has morphed into a more general credit crisis. >>> continued

Impact of the Emergency Economic Stabilization Act of 2008 on Investment Management Firms

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The Emergency Economic Stabilization Act of 2008 (Act) will directly impact investment management firms of all kinds, with the greatest impact on those firms managing accounts holding “troubled assets” eligible for purchase by the U.S. Treasury and the few firms chosen to manage the Treasury’s portfolios of troubled assets. Although the Act runs 451 pages, details on key aspects of the government’s troubled asset recovery program that affect the investment management industry remain to be spelled out by the Treasury. Despite this, investment management firms should start considering how various aspects of the Act may affect their business activities. We discuss these subjects below. >>> continued

Congress Passes Financial Services Regulatory Relief Act, Timetable for Enactment of Final Rules Under Gramm-Leach-Bliley Act

On September 30, 2006, Congress passed the Financial Services Regulatory Relief Act of 2006 (the Act). The President is expected to sign the legislation into law. The Act largely affects the activities of banking institutions and, in several respects, affects banks that engage in certain types of securities business,

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SEC Staff Issues Guidance on Registration of Hedge Fund Advisers

On August 10, 2006, the SEC’s Division of Investment Management (Staff) issued a letter on the effects of the decision of the U.S. Court of Appeals for the D.C. Circuit in Goldstein v. SEC. In vacating the SEC’s rule requiring registration of certain hedge fund advisers, Rule 203(b)(3)-2 under the Investment Advisers Act of 1940 (Advisers Act), the Goldstein decision referred to the entire SEC Release that accompanied the adoption of the rule. As a result, the D.C. Circuit appears to have vacated the entire rulemaking, which included rule amendments in addition to the registration requirement itself.

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