On August 8, 2011, the Massachusetts Securities Division (the “Division”) adopted regulations regarding the charging of performance based fees by investment advisers (the “Performance Fee Rule”.) Under new regulation 950 CMR 12.205(9)(c)(17), investment advisers in Massachusetts (regardless of whether they are registered with the Division or exempt from registration) will be prohibited from charging performance based fees unless those fees comply with Rule 205-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Rule 205-3 states that an investment adviser may only charge a performance fee with respect to “qualified clients” (see below). The Performance Fee Rule will become effective upon publication in the Massachusetts Register. The next publication of the Massachusetts Register is scheduled for August 19, 2011.