Investment Advisors Act

SEC Temporary Rule on Principal Trades with Advisory Clients

On December 20, 2012, the SEC amended Temporary Rule 206(3)-3T under the Investment Advisers Act of 1940 that establishes an alternative means for investment advisers who are registered as broker-dealers to meet the requirements of Section 206(3) of the Investment Advisers Act when they act in a principal capacity in transactions with certain advisory clients.  The amendment extends the sunset date for the rule from December 31, 2012 to December 31, 2014.  SEC Rule.

SEC Amends Net Worth Standard for Accredited Investors

On December 21, pursuant to Section 413(a) of the Dodd-Frank Act, the SEC amended several rules under the Securities Act, the Investment Company Act, and the Investment Advisers Act to exclude the value of an individual’s home from net worth calculations used to determine whether such individual qualifies as an accredited investor. The amendments also: (i) clarify the treatment of loans secured by a primary residence for purposes of this new net worth calculation and (ii) permit individuals who qualified as accredited investors under the prior definition of accredited investor to use the previous net worth standard for certain follow-on investments. The amendments will be effective on February 27. SEC Release. SEC Final Rule.

SEC Rule for Investment Advisors

On December 28, the SEC issued a final rule extending the temporary rule which established an alternative means for investment advisors registered as broker-dealers to meet requirements under the Investment Advisors Act when acting in a principal capacity in certain transactions. The final rule extends the sunset for the temporary rule from December 31, 2010 to December 31, 2012. SEC Final Rule.