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Articles : Exemptions from Registration Under the Advisers Act

Exemptions from Registration Under the Advisers Act

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By Gisella Rivera

Pursuant to final rules adopted by the Securities and Exchange Commission (“SEC”) effective July 21, 2011, family offices, foreign private advisers and investment advisers to venture capital funds and to private funds with assets under management of less than $150 million are exempt from registration under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). These exemptions are mutually exclusive and an adviser relying on one exemption may not rely on another. Further, advisers who choose to rely on the exemption from registration provided to advisers of venture capital funds (the “venture capital fund exemption”) or to advisers of private funds with assets under management of less than $150 million (the “private fund exemption”) are still subject to certain reporting requirements under the Advisers Act and may be required to register with state securities authorities pursuant to state securities laws. Investment advisers who formerly relied on an exemption from registration pursuant to Section 203(b) (3) of the Advisers Act and who are not otherwise eligible for an exemption from registration under the foregoing final rules must register with the SEC no later than March 30, 2012, which would require filing a registration application with the SEC no later than February 14, 2012.

Below is a brief discussion of some of the finer points of the above recently issued SEC final rules….