The Dodd-Frank Act (the “Act”) subjects more private fund advisers to registration. The Act removes two existing exemptions from registration under the Investment Advisers Act of 1940 that most private fund investment advisers currently rely on to avoid registration. The Act repeals in its entirety the “private adviser exemption” previously found in Section 203(b)(3) of the Advisers Act. The Act also defines the term “private fund” as an issuer that would be an investment company as defined by the Investment Company Act of 1940 but for the exemptions provided by Section 3(c)(1) or 3(c)(7) of the Investment Company Act. The Act does provide a number of exemptions for various types of investment advisers, including any “family office.” Historically, there has not been a statutory or other uniform regulatory definition of a “single family office.” It is generally acknowledged that many families, for estate or other tax planning purposes, or in order to gain certain efficiencies in managing their assets, organize an entity or entities for these purposes. It is also common that larger family offices may provide services to non-family member clients. In recent years, there has been a proliferation of single family offices. In fact, in the SEC’s release discussed below, the SEC notes that there are estimated to be between 2,500 and 3,000 single family offices managing more than $1.2 trillion in assets.
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