Title IV

Final Rules Affecting Private Fund Advisers Adopted Under the Dodd-Frank Act

On June 22, 2011, the Securities and Exchange Commission (the “SEC”) adopted final rules and rule amendments implementing the provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) through the issuance of two Releases. Release IA-3222 (the “Exemptions Release”) defines terms and addresses certain issues with respect to the new exemptions from registration provided to investment advisers. Release IA-3221 (the “Implementing Release” and, together with the Exemptions Release, the “Releases”) implements companion amendments to the Investment Advisers Act of 1940 (the “Advisers Act”).

The exemption provided by Section 203(b)(3) of the Advisers Act (the “Private Adviser Exemption”), on which many advisers to “Private Funds” have relied, was repealed by the Dodd-Frank Act, effective July 21, 2011. As anticipated, the SEC granted relief to such advisers by providing, pursuant to new subsection (e) of Rule 203-1, that such an adviser is “exempt from registration with the [SEC] as an investment adviser until March 30, 2012,” provided that such adviser satisfies conditions which closely follow the requirements of the Private Adviser Exemption. This Alert provides an overview of how the new exemptions will be interpreted under the Exemptions Release and implemented under the Implementing Release.

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SEC Final Rules for Private Fund Adviser Registration

On June 22, the SEC adopted final rules and rule amendments under the Investment Advisers Act of 1940 implementing provisions of Title IV of the Dodd-Frank Act. As anticipated, the SEC announced that it will extend the deadline for advisers that had been relying upon the “private adviser exemption” under Section 203(b)(3) of the Advisers Act to register with the SEC until March 30, 2012. (The private adviser exemption was rescinded by the Dodd-Frank Act, effective July 21.) We will provide an analysis of the final rules adopted and other actions taken upon reviewing them in their final form. SEC Release. Implementing Release Final Rules. Exemptions Release Final Rules.

SEC Open Meeting to Consider Adoption of New Rules for Private Fund Advisers

On June 9, the SEC announced an Open Meeting scheduled for June 22 at 10:00 a.m. to consider the adoption of: (i) rules and rule amendments under the Investment Advisers Act of 1940 (Advisers Act) designed to give effect to provisions of Title IV of the Dodd-Frank Act that, among other things, increase the statutory threshold for registration of investment advisers with the SEC, require advisers to hedge funds and other private funds, including private equity funds, to register with the SEC, and address reporting by certain investment advisers that are exempt from registration; and (ii) rules that would implement new exemptions from the registration requirements of the Advisers Act for advisers to “venture capital funds” and advisers with less than $150 million in private fund assets under management in the United States. The SEC also will consider whether to adopt a rule defining “family offices” that will be excluded from the definition of an investment adviser under the Advisers Act. We will provide an analysis of the final rules adopted and other actions taken after publication. SEC Sunshine Act Meeting Notice.