Finding A Way.

New Rules for Investment Advisers: Is Your Family Office Required to Register Under the New Rules?

Investment adviser compliance As we mentioned in previous blog post, the Dodd-Frank Act repealed the private adviser exemption and replaced it with several new exemptions from registration under the Investment Advisers Act. This included the adoption of a new rule for “family offices.”

The SEC’s new family office rules exclude single-family offices from all Advisers Act regulation. It is important to note that multi-family offices are explicitly excluded from the exemption.

To qualify, the family office must only serve “family members,” key employees of the family office itself, and charities funded solely by the family. The SEC defines “family member” as any lineal descendant of a common ancestor (including spouses) up to 10 generations. The SEC compromised with commenters by allowing the family to select and change the common ancestor.

In addition, the rule allows a one-year transition period for involuntary transfers to non-family members. It also requires pooled investment vehicles to be owned and operated solely for the benefit of family clients.

How We Can Help

If a family office does not qualify, the SEC may still grant exemptive relief. Accordingly, there is time to restructure to meet the requirement or get exemptive relief, but the planning should start soon.

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.