August 08, 2011

The Dodd-Frank Act,  among other things, repealed §203(b)(3) of the Investment Advisers Act of 1940 (the “Advisers Act”) exempting an investment adviser with fewer than 15 clients in the preceding 12 months from registration.  To address certain considerations arising from repeal of the fewer-than-15 client exemption, Dodd-Frank created new exemptions for:

  • an investment adviser that advises solely venture capital funds;
  • an investment adviser that advises solely Private Funds if the adviser has assets under management in the U.S. of less than $150 million;
  • a family office; and
  • certain foreign private advisers.

As in the case of many Dodd-Frank provisions, implementation of the new exemptions is dependent upon regulatory action, in this case by the SEC.  In the advisory, Jenner & Block Partner Paul F. Jock II summarizes the SEC’s recent actions in this regard.