The US Securities and Exchange Commission (SEC) said that David Grim will serve as the new acting director for the agency's Division of Investment Management.
Grim, the division’s deputy for two years, replaces Norm Champ, who left the commission last month to become a visiting scholar for Harvard Law School’s spring semester.
The Division of Investment Management is responsible for key rulemaking over the multi-trillion dollar asset management industry. One issue important to private equity firms has been the question of broker-dealer registration.
During a 2013 speech, a SEC official raised the possibility that private equity firms were in violation of broker-dealer registration requirements if their marketing staff received bonuses for selling fund commitments or when charging certain transaction fees during an acquisition.
A recent SEC no-action letter clarified that private business brokers do not necessarily need to be licensed to pitch deals, but specific guidance on private equity broker-dealer registration is still expected. The private equity industry is hoping Grim’s division will deliver the guidance before year-end.
The SEC has cited broker-dealer registration as a problem in deficiency letters, sources tell pfm, but the commission has yet to bring any enforcement action on the matter. Congress is debating a bill that would largely exempt private equity firms from that threat.
“[Grim] has served with distinction for nearly 20 years in the Division of Investment Management,” said in a statement SEC chair Mary Jo White. “The commission and investors will benefit tremendously from his extensive legal knowledge, deep roots in the work of the division, and his managerial expertise.”