Finding A Way.

New Rules for Investment Advisers: Do You Qualify for the Foreign Private Adviser Registration Exemption?

Investment adviser complianceAs we mentioned previously, the SEC has crafted a new set of rules for foreign private advisers. Advisers relying on this new exemption are not subject to reporting or recordkeeping provisions under the Advisers Act and are not subject to examination by the SEC. 

As with other exemptions, determining whether you qualify for the foreign private adviser registration exemption requires detailed analysis, as the requirements are fairly restrictive.

To be eligible for the Foreign Private Adviser Exemption, an adviser must:

  • Have no place of business in the United States;
  • Have, in total, fewer than 15 clients (e.g., managed accounts or pooled investment vehicles) and investors in the United States in private funds advised by the investment adviser;
  • Have less than $25 million in aggregate assets under management that are attributable to clients in the United States and investors in the United States in private funds advised by the investment adviser; and
  • Neither hold itself out generally to the public in the United States as an investment adviser nor act as an investment adviser to any registered investment company or business development company.

Of course, the devil is in the details. The definitions of “place of business,” “clients,” and “investors” play key roles in the analysis.

How We Can Help Ensure Compliance

Of course, this post provides only a brief overview of the compliance issues facing foreign private advisers. You should consult with experienced counsel to meet the new rules.

Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.

If your company would like to strengthen its business practices, please contact us today so we can leverage our experience to create real-life business and legal solutions to help your business thrive.