Family offices have existed for over a century and have been formed to implement very important and complex objectives, including investment management, corporate succession, estate, gift and income tax planning, and charitable giving issues that are important to the members of the family. Since passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a family office that is an “investment adviser”—an entity that, for compensation, is engaged in the business of giving investment advice to others—has been able to rely on Rule 202(a)(11)(G)-1 (the “Family Office Rule”) under the Investment Advisers Act for exemption from all of the provisions of the Advisers Act. The Family Office Rule provides that a “family office” must be a company that:
has no clients other than family clients;
is wholly owned by family clients and exclusively controlled (directly or indirectly) by one or more family members and/or family entities; and
does not hold itself out to the public as an investment adviser.
The term “family client” is defined in paragraph (d)(4) of the Family Office Rule to include 11 different categories of individuals or companies. Specifically included is any “family member,” and the term “family member” is defined to mean all lineal descendants (including children by adoption, stepchildren, foster children and individuals who were minors when another family member became a legal guardian of such individuals) of a common ancestor (who may be living or deceased), and such lineal descendants’ spouses or spousal equivalents, provided that the common ancestor is no more than 10 generations removed from the youngest generation of family members.
The reference point for analysis of who is a family member is a lineal descendant of a common ancestor. By using that singular reference point, it is clear that the wife of that common ancestor, as well as her parents and her siblings, will not be treated as “family members,” so the son or daughter of the common ancestor will not be able to include in the family office his or her mother’s siblings (his or her aunts and uncles) or the children of those siblings (his or her nieces and nephews). This very regrettable omission of what is often referred to as the “distaff” side of a family will occur and reoccur at each succeeding generation and will uniformly affect the in-law side of each lineal descendant’s marriage. If a family office is unable to comply with all of the terms and conditions of the Family Office Rule, it may decide to continue providing investment advisory services to all of its family office clients, including the distaff members, after it has registered under the Advisers Act (unless another exemption from registration is available), or it can seek an exemptive order from the SEC.
The SEC staff recently published Notices of two applications seeking exemptions from the Family Office Rule with respect to distaff members of a family—the mother-in-law in one instance, and the sister-in-law in the other instance. The effect of the orders being sought is to exempt the affected family offices to the extent necessary to permit each family office, taking into account the presence of the distaff member, to rely on the Family Office Rule. It is expected that the appropriate exemptive orders will be issued approximately 30 days from the time that the Notices were issued. Because the distaff issue has the potential to affect so many single-family offices, this is a welcome development, and it is hoped that the SEC will amend the Family Office Rule to make this additional exemptive relief available to every single-family office that has a distaff issue now or in the future.
 Pub. L. No. 111-203, 124 Stat. 1376 (2010) (“Dodd-Frank Act”). Section 409 of the Dodd-Frank Act authorized and required the SEC to adopt a rule that exempts a “family office” from the definition of “investment adviser” in the Investment Advisers Act of 1940 (“Advisers Act”).
 17 C.F.R. § 275.202(a)(11)(G)-1 (2011). To be precise, a family office “shall not be considered to be an investment adviser for purposes of the [Advisers] Act.” Rule 202(a)(11)(G)-1(a). One immediate consequence of the manner in which a family office is excluded from the definition of “investment adviser” is that Section 203A(b)(1)(B) of the Advisers Act will apply to prevent a family office from being subject to state laws requiring registration, licensing or qualification as an investment adviser.
 Rule 202(a)(11)(G)-1(b).
 Gruss & Co., Investment Advisers Act Release No. 3866 (July 1, 2014); Duncan Family Office, Investment Advisers Act Release No. 3867 (July 1, 2014).