New Rules for Investment Advisers: Are You Exempt from Registration?

Investment adviser complianceFor many years, advisers to private funds have been able to avoid registering with the Securities and Exchange Commission because of an exemption that applies to advisers with fewer than 15 clients. The exemption was available to many investment advisors because it counted each fund as a client, as opposed to each investor in a fund.

However, as many are aware, the Dodd-Frank Act eliminated the private adviser exemption. Under the new rules, many investment advisers, particularly those to hedge funds and private equity funds, are now subject to SEC requirements.

The new rules  also created a number of new exemptions from registration based on factors such as size of the fund, location, and the nature of the fund.

Specifically, the New Rules Created Three New Exemptions for:

  • Advisers solely to venture capital funds.
  • Advisers solely to private funds with less than $150 million in assets under management in the United States.
  • Certain foreign advisers without a place of business in the United States.

Due to the complexity of the requirements, we will be devoting a blog post to each of the new registration exemptions in the upcoming weeks. We invite you to check back with us in the next week for details on the compliance issues involved with each exception.

How We Can Help Ensure Compliance

The regulatory burdens placed on hedge funds and private equity groups have grown dramatically, leaving many companies overwhelmed by compliance issues. You should consult with experienced counsel to meet the new rules.

With the March 2012 deadline fast approaching, advisers to hedge and private equity funds should be beginning the registration process in earnest. If you are concerned about your company’s progress, please contact us to find out how we can help.

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.