Publications

On Friday, November 19, 2010, the U.S. Securities and Exchange Commission (the “SEC”) issued proposed rules relating to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that make fundamental changes in the regulatory regime under the U.S. Investment Advisers Act of 1940 (the “Advisers Act”) for advisers to certain private funds exempt from “investment company” regulation under the U.S. Investment Company Act of 1940 (the “Investment Company Act”). The proposed rules were published in two SEC releases, Rules Implementing Amendments to the Investment Advisers Act of 1940 (the “Implementing Release”) and Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers (the “Exemptions Release”), are subject to a 45-day public comment period, and are to become effective (in final form) on July 21, 2011.

This alert highlights key aspects of the Exemptions Release as it relates to the scope of the exemptions from registration available to non-U.S. investment advisers under the Dodd-Frank Act. It focuses on the exemptions for “foreign private advisers” (the “Foreign Private Adviser Exemption”) and for advisers who act solely as advisers to private funds and who have less than $150 million in assets under management in the United States (the “Private Fund Adviser Exemption”).

In addition, this alert briefly summarizes certain matters in the Implementing Release. These include a new uniform method for calculating an investment adviser’s assets under management for purposes of the Foreign Private Adviser Exemption and the Private Fund Adviser Exemption, as well as recordkeeping and reporting requirements applicable to “exempt reporting advisers,” a new regulatory classification that includes advisers relying on the Private Fund Adviser Exemption.

Download Full Report