As COVID-19, oil price movements and other geopolitical factors continue to roil the financial markets, there are steps that all investment managers can and should take to mitigate legal risks for themselves and their investors. In addition, there are specific challenges and opportunities for managers of hedge funds and credit, direct lending and distressed funds. In this note, we highlight some of the most relevant considerations.

Please see our other Schulte Roth & Zabel Alerts relevant to Investment Managers posted on our COVID-19 Resource Center, available here.

This SRZ publication was principally authored by Stephanie R. Breslow, Josh Dambacher, Jennifer M. Dunn, David J. Efron, Christopher Hilditch, Daniel F. Hunter, Peter G. Naismith, David Nissenbaum, Daniel V. Oshinsky and Craig Stein with thoughtful input from many of their colleagues in the SRZ COVID-19 Working Group.

If you have any questions concerning this publication, please contact your attorney at Schulte Roth & Zabel or one of the authors.

This communication is issued by Schulte Roth & Zabel LLP and Schulte Roth & Zabel International LLP for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. In some jurisdictions, this publication may be considered attorney advertising. ©2020 Schulte Roth & Zabel LLP and Schulte Roth & Zabel International LLP. 

In June 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an interim final rule amending the Reporting, Procedures and Penalties Regulations, 31 CFR Part 501 (“Interim Final Rule”). Most importantly, the Interim Final Rule, which became effective on June 21, 2019, imposes new requirements relating to who must file reports on rejected transactions with OFAC and what transactions must be reported. Most recently, at its Symposium on Nov. 12, 2019, OFAC emphasized the importance of these new requirements. In this article, lawyer Betty Santangelo, partner Gary Stein, special counsel Melissa Goldstein, associate Hannah Thibideau and former Schulte lawyers Stephanie Kelly and Jennifer Opheim outline the new OFAC reporting requirements.