Exemptions For Advisers To Venture Capital Funds, Private Fund Advisers With Less Than $150 Million In Assets Under Management, And Foreign Private Advisers


On June 22, 2011, to implement provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) that apply to the creation of certain exemptions for advisers to venture capital funds, private fund advisers with less than $150 million in assets under management and foreign private advisers, the Securities and Exchange Commission (the “SEC” or the “Commission”) adopted final rules implementing new exemptions from the registration requirements of the Investment Advisers Act of 1940 (the “Advisers Act”).

The SEC created three new rules: (i) Rule 203(l) -1, which defines a “venture capital fund” for purposes of the exemption; (ii) Rule 203(m)-1, which provides an exemption from registration for advisers with less than $150 million in private fund assets under management in the United States; and (iii) Rule 202(a)(30)-1, which clarifies the meaning of certain terms included in a new exemption from registration for “foreign private advisers” that replaces existing Rule 203(b)(3). In addition, the SEC clarified rules relating to sub-advisory relationships and advisory affiliates.

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