Biography

Bailey advises domestic and international investment managers, private funds, hedge funds and institutional investors of such products on regulatory, compliance and transactional matters. He provides counsel on investment negotiations, co-investments, fund formation, structuring and governance across a range of sectors, including credit, private equity and real estate. Before joining Sullivan, Bailey was an advisor at a private investment firm in Missouri.

Education

Duke University School of Law (J.D.)
Boston College (B.A., cum laude)

Bar & Court Admissions

Massachusetts

Viewpoints

All Viewpoints

The End of the Road for the SEC’s Administrative Order “No-Deny” Rule

The SEC has rescinded, effective immediately, its long-standing policy requiring a defendant or respondent, as a condition to settlement of an administrative proceeding, to agree not to publicly deny the allegations set forth in the relevant complaint or administrative order. The SEC has enforced this policy since 1972, and it is currently codified it in its informal rules of procedure. The SEC also announced that, effective immediately, it would not enforce “no-deny” clauses in SEC administrative orders already entered. The purpose of the no-deny policy, from the SEC’s perspective, was to avoid having persons the subject of an administrative decree from “creating, or permitting to be created, an impression that a decree was being entered or a sanctioned imposed, when the conduct alleged did not, in fact, occur.” In rescinding the rule, the SEC said that it expected that it will have more flexibility in settling enforcement actions, which should allow it to conserve its resources, provide certainty, and potentially expedite the return of money to injured investors. The SEC has long permitted settlements on a “neither admit nor deny” basis. However, the rescission of the no-deny policy is expected to create new strategic considerations for defendants evaluating the reputational implications of publicly denying allegations following settlement. For example, an investment adviser or fund manager responding to requests for proposal from potential clients and investors should have more flexibility in fully describing why it settled an enforcement proceeding, rather than simply relying on the statement in the order that it “neither admits nor denies” the purported violation. Further Observations We also note the following: The change does not limit the SEC’s discretion to continue to settle matters on a “neither admit nor deny” basis, or, more importantly, require admissions in appropriate cases as part of a negotiated resolution. Rescission of Rule 202.5(e), the SEC rule that covered the policy, aligns the SEC more closely with the practices of other federal agencies. The rescission took effect immediately as a general statement of policy and was not subject to notice-and-comment rulemaking. For More Information This Client Alert has been prepared by John Hunt, a Partner, and Bailey Travers, an Associate, in the Investment Management and Private Funds practice groups of the international law firm of Sullivan & Worcester LLP. Please sign up here if you would like to be one of the first to receive Sullivan’s Investment Management and Private Fund client alerts. For more information about this alert or Sullivan’s Investment Management and Private Fund practices, please contact Mr. Hunt, who may be reached in our Boston office by calling +1 (617) 338-2961, our London office by calling +44 (0)20 7448 1000, or by email at jhunt@sullivanlaw.com. For more information on all legal services offered by Sullivan, please visit us at www.sullivanlaw.com. This Client Alert is provided for general informational purposes only and does not constitute legal advice.

Rolling Back Private Fund Reporting: Proposed Amendments to Form PF

The U.S Securities and Exchange Commission (the “SEC”) and the U.S. Commodities Futures Trading Commission (the “CFTC”) have jointly proposed amendments (the “Proposed Amendments”) to Form PF. Form PF is a form that investment advisers of certain private funds are required to complete and file with the SEC and CFTC, to provide them, as well as the Financial Stability Oversight Council (“FSOC”), with information principally about private fund exposure to leverage and counterparty risk. As discussed below, the Proposed Amendments would, among other things, eliminate the requirement to file the form for most small private fund investment advisers, and reduce certain disclosure obligations on those private fund investment advisers that must continue to file. The Proposed Amendments are now available for public comment. The public will have until June 23, 2026 to comment on the Proposed Amendments. A Short History of Form PF Prior to the financial crisis in 2008, U.S. private funds were not subject to any meaningful disclosure obligations. The Dodd-Frank Act, enacted in the wake of that crisis, directed FSOC to monitor risks to the U.S. financial system. That act also required the SEC and CFTC to establish reporting and recordkeeping requirements applicable to certain investment advisers to private funds, and for the SEC and CFTC to consult with FSOC on the form and content of those reports. Since then, the SEC and CFTC have made several significant amendments to Form PF. In 2014, the SEC amended Form PF to include “liquidity funds,” that is, private money market funds. Those amendments were done in conjunction with significant amendments to Rule 2a-7 under the Investment Company Act of 1940 (the “1940 Act”), the SEC rule that governs registered money market funds. In 2023, the SEC added current reporting obligations for large hedge funds advisers and certain quarterly reporting obligations private equity fund managers. In 2024, the SEC and CFTC made comprehensive amendments to Form PF. Those agencies, however, have had to push back the compliance dates on those comprehensive amendments several times in response to industry objections, as well as postpone implementation as directed by the U.S. President pursuant to his January 20, 2025 memorandum directing all U.S. government agencies to review all rules that had been published but which had not taken effect by the date of his memorandum. The Proposed Amendments have been issued in response to the direction in the President’s January 20, 2025 memorandum. Proposed Changes to the Filing Thresholds Raising the filing threshold for all filers from $150 million in private fund assets under management to $1 billion. This change would effectively eliminate the filing requirement for approximately 60 percent of SEC-registered investment advisers to private funds, and it would apply regardless of the categories of funds they advise. Raising the reporting threshold for large hedge fund advisers from $1.5 billion in hedge fund assets to $10 billion. This change would effectively eliminate onerous large-hedge-fund-adviser reporting obligations currently applicable to approximately 65 percent of hedge fund investment advisers currently reporting, and 90 percent of all SEC-registered investment advisers to hedge funds. Principal Changes to Form PF Reporting Obligations The Appendix accompanying this Client Alert includes a chart briefly describing all of the proposed changes to Form PF. The following are descriptions of the principal proposed changes: Eliminate separate reporting requirements for feeder funds with de minimis holdings outside of a single master fund, U.S. treasury bills and/or cash or cash equivalents. Eliminate “look through” requirements and instead, allow filers to report indirect exposures based on reasonable estimates consistent with internal methodologies and standard conventions. Eliminate the requirement for private equity fund advisers to submit quarterly reports regarding adviser-led secondaries, general partner removals, terminations of investment periods, and fund terminations. Narrow the universe of trading vehicles (for holding assets, incurring leverage, or conducting trading or other activities) that advisers are currently required to identify in Form PF solely to trading vehicles that face counterparties and creditors or that are reported on Form ADV as a private fund. Eliminate questions for large hedge fund advisers regarding the total amount of collateral posted by counterparties that may be and has been rehypothecated by the hedge fund. Some Observations We note the following: Form PF currently is a confidential form accessible only to U.S. regulators and then, only to those regulators with authority to access specific information. The Proposed Amendments would retain the form’s current confidentiality restrictions. When Form PF was originally adopted in 2011, its purpose was principally to assist FSOC in its assessment of systemic risk in the U.S. financial system. With the 2014 amendments, in a footnote, the SEC and CFTC acknowledged the form’s utility in their own regulatory programs, including examinations, examinations, and investor protection. Since then, the SEC and CFTC have used that utility as justification for expanding the disclosure required by private fund investment managers. In the Proposed Amendments, however, by reducing the number of investment advisers subject to the form’s filing requirements, the SEC and CFTC appear to be moving away from a form with utility for the SEC and the CFTC, to one with more utility to FSOC. Under the Proposed Amendments, Form PF would continue to require only reporting relating to private funds that rely on the exclusions from the definition of an investment company under Sections 3(c)(1) and 3(c)(7) of the 1940 Act, that is, funds that do not make a public offering and either have 100 or fewer investors or whose only investors are “qualified purchasers,” respectively. Under the Proposed Amendments, Form PF would continue to apply only to investment advisers (U.S. and foreign) registered with the SEC, including those that also are registered with the CFTC as a commodity pool operator or a commodity trading advisor. For More Information This Client Alert has been prepared by John Hunt, a Partner, and Bailey Travers, an Associate, in the Investment Management and Private Funds practice groups of the international law firm of Sullivan & Worcester LLP. For more information, Mr. Hunt may be reached in our Boston office by calling +1 (617) 338-2961 or our London office by calling +44 (0)20 7448 1000, or by email at jhunt@sullivanlaw.com; Mr. Travers may be reached in our Boston office by calling +1 (617) 338-2895 or by email at btravers@sullivanlaw.com. This Client Alert is provided for general informational purposes only and does not constitute legal advice.

News

All News

Sullivan Advises Boston Green in Recapitalization with Fort Point Capital

Sullivan advised Boston Green Company, a leading provider of sustainable waste and recycling solutions in the Northeast, on its recapitalization with Fort Point Capital, a Boston‑based private equity firm focused on lower middle‑market investments. The recapitalization provides Boston Green with strategic capital to support its continued growth and service expansion, further positioning the company for long‑term success in the environmental services sector. The Sullivan team advising Boston Green included Lew Segall, Amy Sheridan, Erika Todd, Vic Baltera, Sharon Leifer, Christopher Curtis, Alexander Gansebom, Bailey Travers and Janice Lee. Read the full press release here.

Bailey Travers

Bailey Travers

Biography

Bailey Travers

The End of the Road for the SEC’s Administrative Order “No-Deny” Rule

Rolling Back Private Fund Reporting: Proposed Amendments to Form PF

Misleading Social Media Posts Can Cost You $500,000 in Massachusetts

Bailey Travers

Sullivan Advises Boston Green in Recapitalization with Fort Point Capital

Featured

Stay Connected

Careers