• SEC Proposes Rules to Implement Dodd-Frank Provisions Relating To Registration and Reporting By Investment Advisers
  • January 13, 2011 | Authors: Richard L. Chen; David F. Freeman; Richard P. Swanson
  • Law Firms: Arnold & Porter LLP - New York Office ; Arnold & Porter LLP - Washington Office ; Arnold & Porter LLP - New York Office
  • The US Securities and Exchange Commission (SEC) recently proposed a series of rules and rule amendments designed to clarify the registration and reporting obligations for certain categories of investment advisers in the aftermath of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that amended the Investment Advisers Act of 1940 (Advisers Act). Among other things, the proposed rules provide guidance to certain “mid-sized” SEC-registered investment advisers concerning the process for transition to state regulation from SEC regulation; define the reporting obligations that certain advisers would need to undertake even if they are exempt from registration; and enhance public reporting by registered investment advisers and other reporting advisers, including significant new mandated disclosures concerning private funds advised by such investment advisers. The proposed rules, disseminated in a November 19, 2010 release (Proposing Release) are designed to implement provuisions of Title IV of the Dodd-Frank Act. Among other things, Title IV of the Dodd-Frank Act: (a) reallocated responsibility for regulatory oversight of certain advisers with assets under management of between $25 million and $100 million (mid-sized advisers) to the states from the SEC; (b) repealed the Section 203(b)(3) exemption from Advisers Act registration historically relied upon by many advisers to private funds, including hedge funds, private equity funds, and venture capital funds (Private Fund Adviser Exemption); and (c) created several more narrowly tailored exemptions for certain categories of investment advisers, including, family offices, advisers solely to venture capital funds, advisers solely to private funds with assets under management of less than $150 million, foreign private advisers, and commodity trading advisers registered with the Commodity Futures Trading Commission. These exemptions are discussed in more detail in a separate advisory that can be found at http://www.arnoldporter.com/public&under;document.cfm?id=17125&key=3F1. www.arnoldporter.com