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SEC Proposes New Rules to Implement Advisers Act Provisions of the Dodd-Frank Act — Implications for Non-U.S. Advisers
December 21, 2010
On November 19, 2010, the SEC proposed new rules and rule amendments under the Investment Advisers Act of 1940 that are designed to give effect to the provision of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act and, among other things: (i) clarify the eligibility requirements for registration of investment advisers with the SEC and the transition process to state registration; (ii) address registration of investment advisers to hedge funds and other private funds with the SEC; (iii) amend Form ADV to require disclosure of more information by investment advisers and the private funds they manage; (iv) implement the Dodd-Frank Act's mandate to require reporting by certain "exempt reporting advisers;" (v) define "venture capital fund" for purposes of the exemption to SEC registration for investment advisers solely advising venture capital funds; (vi) provide clarity with respect to the exemptions to SEC registration for investment advisers solely advising private funds and with aggregate regulatory assets under management of less than $150 million and "foreign private advisers;" and (vii) revise the SEC's recently promulgated "pay-to-play" rule. This memorandum provides an overview of the implications of the proposed rules for non-U.S. investment advisers that have advisory clients in the United States or act as managers to hedge funds, private equity funds or other private pools of capital that have raised funds in the United States.