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(b) Private Fund Adviser Exemption. To qualify for this exemption, the Manager must
(i) act solely as an adviser to qualifying private funds (i.e., Section 3(c)(1) or 3(c)
(7) funds); and (ii) have assets under management in the U.S. of less than US$150
million.
To the extent the Manager cannot satisfy either of these exemptions but advises
investment funds that run a venture capital, real estate or commodity strategy, there
may be additional exemptions from SEC registration on which the Manager can rely.
Please note that a Manager that operates under the exemption set forth in (b) above
would need to file with the SEC as an exempt reporting adviser.
Other Considerations
If an investment fund utilizes commodity interests (e.g., certain derivative instruments)
for investment or hedging purposes, the Manager (or other relevant person(s)) may be
required to register with the CFTC as a commodity pool operator and/or a commodity
trading advisor, unless exemptions are available.
In addition, if a private fund sells its securities to U.S. residents directly, rather than
through a registered broker-dealer, the private fund typically relies on the non-exclusive
safe harbor set forth in Rule 3a4-1 of the Securities Exchange Act of 1934, as amended
(the so-called “issuer exemption”), which permits certain “associated persons” of the
fund to participate in the sale of an issuer’s securities without being considered a broker,
provided that certain criteria are met.
Conclusion
Any Israeli asset manager contemplating an offering of fund interests in the U.S. should
engage legal counsel in advance to assist it in navigating the various legal and regulatory
issues that such offering will entail. Counsel will also be able to assist with any filings
required as a consequence of marketing activities in the U.S.
Any Israeli asset manager contemplating an offering of fund interests in the
U.S. should engage legal counsel in advance to assist it in navigating the various
legal and regulatory issues that such offering will entail.