• SEC Adopts Final Rules Defining Scope of "Family Office" Exclusion from the Definition of "Investment Adviser"
  • July 25, 2011 | Authors: Paul A. Gajer; Ira I. Roxland
  • Law Firm: SNR Denton - New York Office
  • The U.S. Securities and Exchange Commission recently adopted Rule 202 (a)(11)(G)-1 under the Investment Advisers Act of 1940 defining the scope of the "family office" exclusion from the definition of investment adviser. The exclusion was created last year by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the Rule, a "family office" is defined as any company that: (i) has no clients other than "family clients," (ii) is wholly owned by family clients and controlled, directly or indirectly, by "family members" and/or "family entities" and (iii) does not hold itself out to the public as an investment adviser. Family offices currently exempt from registration because of the "private adviser" exemption from registration that the the Dodd-Frank Act repealed that do not fall within the new family office exclusion or some other exemption from registration have until March 30, 2012 to register under the Advisers Act. Since the SEC may take up to 45 days to process an application for registration, family offices that do not fall within the new family office exclusion must file a complete application, including both Part 1 and Part 2A of Form ADV, by February 14, 2012 to meet the new deadline.