Effective as of July 21, 2011, the Dodd-Frank Act eliminated Section 203(b)(3) of the Advisers Act (commonly referred to as the “private adviser” exemption), which provided a federal registration exemption for any adviser that: (1) had fewer than 15 clients over the prior 12 months; (2) did not hold itself out to the public as an investment adviser; and (3) did not act as an investment adviser to a registered investment company or a business development company. In place of the private adviser exemption, the Dodd-Frank Act created several new exemptions. Effecting and implementing those new exemptions required the new SEC rules that were adopted last week in the Exemptive and Interpretive Releases (the “new rules”).
To provide advisers with additional time to comply with the new rules, the SEC adopted transition rules which generally provide that advisers have until March 30, 2012 to come into compliance with the revised Advisers Act registration and reporting requirements. Generally, these transition rules are most significant for: (1) advisers previously exempt from registration under the private adviser exemption that are no longer exempt under the new rules; (2) currently registered advisers (“RIAs”) that have new reporting obligations (particularly with respect to “private funds”); (3) advisers who require a period of time to meet one of the new registration exemptions adopted under Dodd-Frank; and (4) advisers no longer eligible to remain registered with the SEC.
For more information about the contents of this alert, please contact:
Elizabeth Shea Fries
Private Investment Funds
Real Estate Investment Management & Joint Ventures
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