SEC Issues Proposals To Implement Dodd-Frank and Require Private Fund Advisers To Register


On November 19, 2010 the Securities and Exchange Commission ("SEC") issued a release proposing new rules and rule amendments under the Investment Advisers Act of 1940 ("Advisers Act") to give effect to the provisions of Title IV of the Dodd-Frank Act (a/k/a, the "Private Fund Investment Adviser Registration Act of 2010") (See Release No. IA-3110). Among other changes, these amendments include reallocating oversight of certain mid-sized investment advisers to the states, repealing the "private adviser exemption" currently included in the Advisers Act, and amending the SEC's "pay-to-play" rules.

Eligibility of Advisers for SEC Registration

The Advisers Act currently prohibits an adviser from registering with the SEC if such adviser is regulated by the state in which it has its principal office and place of business, unless it has assets under management of at least $25 million. Dodd-Frank provides for a new group of "mid-sized advisers," and prohibits an adviser that is registered in the state in which it has its principal office and place of business, and has between $25 million and $100 million in assets under management, from registering with the SEC. The Dodd-Frank provision effectively raises the threshold for SEC registration from $25 million to $100 million.

Dodd-Frank provides for three exemptions to the prohibition on SEC registration: (1) if the adviser is not required to register as an adviser in the state in which it maintains its principal office and place of business; (2) if the adviser was registered, it would not be subject to an examination by the state regulator; and (3) if the adviser is required to register in 15 states or more. The SEC previously adopted six exemptions from the prohibition, and is proposing amendments to three of those exemptions as discussed in more detail below.

Please see full Alert below for further information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.