Clifford Chance
Casting a Wide Net: SEC Significantly Expands Regulation of Non-U.S. Investment Advisers, Adopts Final Rules Under Dodd-Frank
26 June 2011
On June 22, 2011, almost five months after the close of the formal public comment period, the U.S. Securities and Exchange Commission (the “SEC”) adopted final rules relating to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) that modify the U.S. Investment Advisers Act of 1940, as amended (the “Advisers Act”). These provisions expand the Advisers Act's coverage to include many formerly-exempt investment advisers to private equity and hedge funds. From the standpoint of non-U.S. investment advisers, the final rules are identical to the proposed rules in nearly all material respects. Two SEC releases, Rules Implementing Amendments to the Investment Advisers Act of 1940, Release No. IA-3221 (the “Implementing Adopting Release”) and Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers, Release No. IA-3222 (the “Exemptions Adopting Release”), contain the published text of the final rules.
As predicted, the SEC officially postponed the compliance date for the expanded registration requirements. An investment adviser that becomes subject to registration under the Advisers Act due to the elimination of the “private adviser” exemption will not need to register with the SEC (or report information if an "exempt reporting adviser") until March 30, 2012. Investment advisers required to register with the SEC should plan to file their completed Form ADV (Parts 1 and 2) no later than February 14, 2012 to ensure compliance by the deadline.
