Regulation D Annual & Interim Amendments for Hedge Funds
Requirements for Updating the Form D
Initial Filing Requirement
Hedge funds are obligated toe a Form D with the SEC within 15 days of the first subscription of hedge fund interests. This filing is done completely online through the SEC’s EDGAR filing system.
Annual Amendment Required for Form D
Hedge funds which are continuously offering their interests are required to file an amended electronic Form D on an annual basis (i.e. on or before the anniversary of the most recent amendment (or original offering)). Real estate funds and private equity funds which have made a “final closing” will not be required to file an annual amendment unless one year lapses from the first sale date and the final closing date. See generally Rule 503(a)(3)(iii).
Requirement to Correct Errors or Report Changes
Hedge funds must file amendments to Form D to correct errors or report changes in information reported on previous Form D filings. The amendment must be filed as soon as practicable.
Generally all changes will require an amendment except for certain more administrative changes.
The changes which do not require instant amendment include:
• The address or relationship to the issuer of a related person identified in Item 3 of Form D;
• The fund’s revenues or aggregate net asset value;
• The minimum investment amount, if the change is an increase, or if the change, together with all other changes in that amount since the previously filed notice of sales on Form D, does not result in a decrease of more than 10%;
• Any address or state(s) of solicitation shown in response to Item 12 of Form D;
• The total offering amount, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice of sales on Form D, does not result in an increase of more than 10%;
• The amount of interests/securities sold in the offering or the amount remaining to be sold;
• The number of non-accredited investors who have invested in the offering, as long as the change does not increase the number to more than 35;
• The total number of investors who have invested in the offering; or
• The amount of sales commissions, finders’ fees or use of proceeds for payments to executive officers, directors or promoters, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice of sales on Form D, does not result in an increase of more than 10%.
The only time that changes to these items must be reported on an interim basis is when the issuer is otherwise filing a 503(a) amendment.
Rule 503(a)(4) requires that current information must be provided in response to all parts of the Form D, regardless of the reason for the filing. Thus, even when filing an amendment to correct a small error, current information must be given for all parts of the form, even those items excepted under 503(a)(3)(ii). Similarly, when filing to report changes in information that is not under the exception, current information must be provided for all parts of the Form D. And, of course, when making an annual filing, all information must be current.
Some of this information may be outdated. It is recommended that anyone seeking a hedge fund offering speak with a consultant or their counsel.