# Sec guidance `kaal:entity:sec-guidance` **Status.** derived This node is assembled mechanically from the 19 claims that carry the concept tag `sec-guidance`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 19 claims across 7 works, 2012 to 2022. **2012** - [2150377-004](https://wulfkaal.github.io/claims/2150377-004) [failure/argued] *(failure mode)* -- Before Dodd-Frank the perimeter of hedge fund regulation was set by SEC no-action letters on client counting and by courts that gave very limited and sometimes contradictory guidance, so compliance rested on an unstable and uncertain base rather than on rules. > However, the SEC continued to provide guidance mostly in the form of no-action letters to help investment advisers determine the counting of clients to stay exempt from securities regulation.44 Courts also provided very limited and sometimes contradictory guidance.45 Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377 **2014** - [2447306-022](https://wulfkaal.github.io/claims/2447306-022) [empirical/evidenced] *(failure mode)* -- Asked what the SEC should fix first, respondents named the burdensome nature and the ambiguity of Form PF as the most pressing issues, not the substance of what is disclosed. > Respondents identified the burdensome nature and the ambiguity of Form PF as the most pressing issues with Form PF. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-026](https://wulfkaal.github.io/claims/2447306-026) [empirical/evidenced] -- Contrary to the industry's public complaints about SEC support, a majority of respondents rated the best level of SEC staff guidance available for completing Form PF as sufficient or good. > A majority of respondents assessed the best level of SEC guidance in the context of their Form PF completion as sufficient or good. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-027](https://wulfkaal.github.io/claims/2447306-027) [empirical/evidenced] *(failure mode)* -- Where SEC guidance failed, the failure was localized: respondents who found guidance inadequate pointed predominantly to Form PF Section 1c, Item B, which concerns information about the reporting fund. > The majority of the commenters who believed that SEC guidance was inadequate indicated that SEC guidance was particularly unclear with respect to Form PF Section 1c, Item B (regarding Reporting Funds). Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-028](https://wulfkaal.github.io/claims/2447306-028) [empirical/evidenced] -- SEC flexibility in answering Form PF questions is valued by filers: 72.92 percent of respondents said the flexibility the SEC provides is helpful. > Most respondents (72.92%) agreed that the SEC's flexibility in answering questions with respect to Form PF was helpful. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-029](https://wulfkaal.github.io/claims/2447306-029) [mechanism/evidenced] -- SEC flexibility helps filers through a specific mechanism: it authorizes advisers to apply their own internal methodologies when interpreting and answering Form PF questions and to state their own assumptions, rather than forcing them onto an unfamiliar measurement basis. > the most significant benefits of SEC flexibility were that respondents believed they were authorized to use their internal methodologies to interpret and respond to questions, and to articulate their assumptions Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-030](https://wulfkaal.github.io/claims/2447306-030) [failure/evidenced] *(failure mode)* -- Regulatory flexibility can backfire: a category of respondents reported that the flexibility the SEC provides is not useful precisely because it is unclear and generates confusion. > Another category of responses indicated that the flexibility provided by the SEC is not useful because it is not clear and creates confusion. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2447306-041](https://wulfkaal.github.io/claims/2447306-041) [predictive/speculative] -- Most of the identified problems with Form PF are self correcting over time, as the SEC issues additional and improved guidance or revises the core questions and definitions that filers flagged as problematic. > Most of the problems may be addressed over time as the SEC provides additional and improved guidance on Form PF or revises core questions and/or definitions pertaining to core questions that have been identified as problematic. Wulf A. Kaal, Private Fund Disclosures Under the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2447306 - [2470008-004](https://wulfkaal.github.io/claims/2470008-004) [failure/evidenced] *(failure mode)* -- Even though the private fund industry broadly accepted Form PF, the form's core problems for the SEC are the ambiguity of several questions, advisers' disagreement with the definition of funds, and correspondingly insufficient SEC guidance. > the core challenges for the SEC in Form PF include: the ambiguity of several questions on Form PF, private fund advisers' disagreement with the definition of funds in Form PF and corresponding insufficiency of SEC guidance Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-025](https://wulfkaal.github.io/claims/2470008-025) [failure/argued] *(failure mode)* -- Expanding the uses of Form PF data remains difficult so long as there is insufficient confidence in the accuracy of what advisers report, notwithstanding SEC efforts to improve quality through interpretive FAQs and curative amendments. > expanding the utility of Form PF data without sufficient confidence in the accuracy of the information provided by investment advisers on Form PF remains difficult Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 - [2470008-028](https://wulfkaal.github.io/claims/2470008-028) [failure/evidenced] *(failure mode)* -- The substantive defects in Form PF data are the ambiguity of several key questions, inaccurate definitions paired with insufficient SEC guidance, and difficulty aggregating the required information. > Core substantive issues with Form PF include: the ambiguity of several key questions on Form PF, the inaccuracy of Form PF definitions and corresponding insufficiency of SEC guidance for Form PF, and difficulties in aggregating the required Form PF information. Wulf A. Kaal, The Systemic Risk of Private Funds after the Dodd-Frank Act (2014). SSRN: https://ssrn.com/abstract=2470008 **2016** - [2714974-021](https://wulfkaal.github.io/claims/2714974-021) [condition/argued] *(failure mode)* -- Until the SEC finalizes verification rules and gives a clear, comprehensive definition of the reasonable steps an issuer must take, issuers cannot determine at the time of sale whether their verification attempts made general solicitation permissible. > Without appropriate SEC guidance, issuers will have difficulty ascertaining if their verification attempts at the time of the sale of securities made GSGA permissible. Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974 - [2732915-039](https://wulfkaal.github.io/claims/2732915-039) [mechanism/evidenced] -- The SEC's clarifying and optimizing of the legal framework after the Dodd-Frank Act effectively supports the private fund industry in its efforts to comply with the revised standards. > Based on the findings in this study, it appears that the SEC's clarifying and optimizing of the legal framework post Dodd-Frank Act effectively supports the industry in its efforts to comply with the revised standards. Wulf A. Kaal, The Private Fund Industry Five Years after the Dodd-Frank Act – A Survey Study (2016). SSRN: https://ssrn.com/abstract=2732915 **2017** - [2998097-016](https://wulfkaal.github.io/claims/2998097-016) [failure/evidenced] *(failure mode)* -- The SEC's efforts to clarify and optimize the post Dodd-Frank framework cut both ways: they supported industry compliance with the revised standards while simultaneously creating uncertainty and higher costs for the industry. > At the same time, there is sufficient evidence in the findings of this study suggesting that the SEC's implementation and clarification of Dodd-Frank Act registration and reporting requirements for private funds also created uncertainty and higher costs for the industry. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-023](https://wulfkaal.github.io/claims/2998097-023) [failure/evidenced] *(failure mode)* -- Form PF data suffer from core shortcomings: ambiguity in several key questions, inaccurate definitions with correspondingly insufficient SEC guidance, and difficulty aggregating the required information. > These included: the ambiguity of several key questions on Form PF, the inaccuracy of Form PF definitions and the corresponding insufficiency of SEC guidance for Form PF, and difficulties in aggregating the required Form PF information. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 **2022** - [4021599-013](https://wulfkaal.github.io/claims/4021599-013) [condition/evidenced] -- Under the Howey framework the U.S. Supreme Court supplies the investment contract analysis that determines whether a digital asset carries the characteristics of a typical security. > In Howey, 18 the U.S Supreme Court provides a framework for investment contract analysis which can help determine if a digital asset has any of the characteristics of typical securities.19 Although Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-014](https://wulfkaal.github.io/claims/4021599-014) [condition/evidenced] -- For digital assets the decisive element of the Howey analysis is whether the purchaser of the token has a reasonable expectation of profits derived from the efforts of others, which the SEC divides into reliance on the efforts of others and reasonable expectation of profits. > purchaser of such a token has a reasonable expectation of profits derived from others. Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-015](https://wulfkaal.github.io/claims/4021599-015) [condition/evidenced] -- None of the SEC's listed characteristics bearing on reliance on the efforts of others is individually determinative; the element becomes more likely to be met the stronger the presence of those characteristics. > None of these factors are necessarily determinative, but the stronger their presence the more likely the element is met.22 In determining whether there Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-022](https://wulfkaal.github.io/claims/4021599-022) [condition/evidenced] -- Under SEC guidance a token sold for use or consumption by purchasers may fall outside classification as a security, and the SEC lists characteristics whose stronger presence makes a token less likely to be considered a security. > According to SEC guidance, if a token is sold for use or consumption by purchasers it may not be classified as a security for regulatory purposes. The SEC provided a list of characteristics where, the stronger their presence,35 the less likely a token is to be considered a security. Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/sec-guidance.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.