1. April 11, 2011 SEC to Consider Extending Deadline for Investment Adviser
Registration and Compliance Under the Dodd-Frank Act
Private Capital and Investment Group Alert
In a letter to the North American Securities Administrators Association, Inc. dated April 8,
This Alert provides only 2011, Robert E. Plaze, Associate Director of the U.S. Securities and Exchange
general information and Commission (SEC), announced that the SEC is considering providing investment advisers
should not be relied upon as required to register with the SEC as a result of certain provisions of the Dodd-Frank Wall
legal advice. We would be Street Reform and Consumer Protection Act (Dodd-Frank Act) with additional time to
pleased to discuss our
register and comply with the Investment Advisers Act of 1940 (Advisers Act).
experience and the issues
Effective July 21, 2011, the Dodd-Frank Act repeals the private adviser exemption in
presented in this Alert with
section 203(b)(3) of the Advisers Act, which is currently relied upon by many advisers to
those contemplating
private equity funds, venture capital funds, hedge funds and other private funds to avoid
investments in these markets. registration under the Advisers Act. As a result, many private fund advisers formerly
For more information, contact exempt from registration will now be required to register with the SEC unless they are able
your Patton Boggs LLP to rely upon another exemption from registration.
attorney or the authors listed
below. The SEC issued proposed rules in October and November of 2010 to implement many of
the provisions of the Dodd-Frank Act impacting investment advisers. Mr. Plaze’s letter
Authors states that while the SEC anticipates issuing final rules in advance of the July 21, 2011
effective date, he expects that the SEC will consider extending the date by which advisers
Kevin Boardman must register and come into compliance until the first quarter of 2012.
214-758-3570
kboardman@pattonboggs.com
The Dodd-Frank Act also effectively raises the assets under management threshold for
Gregg Buksbaum investment adviser registration with the SEC from $25 million to $100 million, creating a
202-457-6153 new class of “mid-sized advisers.” As a result, many mid-sized advisers who are currently
gbuksbaum@pattonboggs.com
registered with the SEC will be required to withdraw from SEC registration and register at
the state level. Mr. Plaze’s letter indicates that he expects the SEC to also consider
Practice Co-Chairs extending the date by which such mid-sized advisers must transition to state registration
Donald Moorehead
until the first quarter of 2012. This grace period would grant mid-sized advisers additional
202-457-5212 time to comply with state registration requirements before withdrawing their SEC
dmoorehead@pattonboggs.com registration.
Courtney Nowell
A copy of the letter can be found at www.sec.gov/rules/proposed/2010/ia-3110-letter-to-
202-457-6563
cnowell@pattonboggs.com nasaa.pdf.
Additional details concerning the SEC’s proposed rules can be found in our December 23,
2010 client alert.
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