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Christopher Wells

Chris Wells heads Proskauer’s Hedge Funds Group and has been a leading lawyer in the hedge fund industry for more than 30 years. During that time, he has assisted on hundreds of hedge fund launches, counselling and assisting hedge fund managers as they grew from often very modest beginnings to become some of the world’s largest and best known hedge funds.

He advises fund managers and investors on all aspects of the hedge fund business, including fund structuring and formation, seed investments, asset manager M&A transactions, agreements among principals, employment and compensation issues, and regulatory and enforcement matters.

Chris’s long and deep experience in the hedge fund industry gives him a unique ability to counsel clients dealing with some of the most challenging situations that fund managers can encounter, including complex fund restructurings, evolving hedge fund investment terms, hybrid and alternative fund structures, liquidity challenges and constraints, internal disputes, and complex enforcement matters.

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Proskauer’s Hedge Fund Trading Guide offers a concise, easy-to-read overview of the trading issues and questions we commonly encounter when advising hedge funds and their managers. It is written not only for lawyers, but also for investment professionals, support staff and others interested in gaining a quick understanding of the recurring trading issues we tackle for clients, along with the solutions and analyses we have developed over our decades-long representation of hedge funds and their managers.

Applies Broadly to A Wide Range of Equities

Compliance Delayed One Year to Permit Fund Systems Updates

On October 13, 2023, the Securities and Exchange Commission adopted new Rule 13f-2 to require monthly reporting of short sale positions and activity data on new Form SHO by institutional investment managers. The new rules require monthly reporting on new Form SHO of activity related to a broad spectrum of “equity securities.” An investment manager must report on activity and positions where it has investment discretion, subject to thresholds described below. The SEC also amended the CAT NMS Plan to supplement the reporting requirements for covered firms.

On September 29, 2023, the CFTC approved a proposal to amend certain provisions of its regulations relating to commodity pools, specifically Rule 4.7.  The proposal would be the first major change to Rule 4.7 in over 30 years.  The proposal would update the Portfolio Requirement thresholds within the definition of “Qualified Eligible Person” (“QEP”) and would require Commodity Pool Operators (“CPOs”) and Commodity Trading Advisors (“CTAs”) that are currently exempt under Rule 4.7 to provide certain minimum disclosures to potential and current participants in pools and advisory clients.  The proposal also addresses the timing of certain pools’ financial reporting.

If adopted, the proposals will likely impact market practices

In a trinity of proposing releases rolled out in less than three months, the SEC has comprehensively proposed to regulate the use of derivatives and short sales by private investors, including private funds, hedge funds and family offices. The proposed new regulations reflect a decision by…

The SEC recently proposed to require investment managers to report short sale information on a monthly basis if such activity exceeds certain thresholds (described below), and to require broker dealers to begin to mark “buy to cover” trades under Regulation SHO in addition to marking trading activity as “long,” “short,” and “short exempt.”  The definition…