IB 
Union Calendar No. 407 
111TH CONGRESS 
2D SESSION 
H. R. 3818 
[Report No. 111–686, Part I] 
To amend the Investment Advisers Act of 1940 to require advisers of certain 
unregistered investment companies to register with and provide informa-
tion to the Securities and Exchange Commission, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 15, 2009 
Mr. KANJORSKI introduced the following bill; which was referred to the 
Committee on Financial Services 
DECEMBER 16, 2010 
Reported with an amendment, and referred to the Committee on Agriculture 
for a period ending not later than December 17, 2010, for consideration 
of such provisions of the bill and amendment as fall within the jurisdic-
tion of that committee pursuant to clause 1(a) of rule X 
[Strike out all after the enacting clause and insert the part printed in italic] 
DECEMBER 17, 2010 
Committee on Agriculture discharged; committed to the Committee of the 
Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on October 15, 2009] 
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A BILL 
To amend the Investment Advisers Act of 1940 to require 
advisers of certain unregistered investment companies 
to register with and provide information to the Securities 
and Exchange Commission, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Private Fund Invest-
ment Advisers Registration Act of 2009’’. 
SEC. 2. DEFINITIONS. 
Section 202(a) of the Investment Advisers Act of 1940 
(15 U.S.C. 80b-2(a)) is amended by adding at the end the 
following new paragraphs: 
‘‘(29) PRIVATE FUND.—The term ‘private fund’ 
means an issuer that would be an investment com-
pany under section 3(a) of the Investment Company 
Act of 1940 (15 U.S.C. 80a-3(a)) but for the exception 
provided from that definition by either section 3(c)(1) 
or section 3(c)(7) of such Act 
‘‘(30) FOREIGN
PRIVATE
FUND
ADVISER.—The 
term ‘foreign private fund adviser’ means an invest-
ment adviser who— 
‘‘(A) has no place of business in the United 
States; 
‘‘(B) during the preceding 12 months has 
had— 
‘‘(i) fewer than 15 clients in the 
United States; and 
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‘‘(ii) assets under management attrib-
utable to clients in the United States of less 
than $25,000,000, or such higher amount as 
the Commission may, by rule, deem appro-
priate in the public interest or for the pro-
tection of investors; and 
‘‘(C) neither holds itself out generally to the 
public in the United States as an investment ad-
viser, nor acts as an investment adviser to any 
investment company registered under the Invest-
ment Company Act of 1940, or a company which 
has elected to be a business development com-
pany pursuant to section 54 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-53) and 
has not withdrawn such election.’’. 
SEC. 3. ELIMINATION OF PRIVATE ADVISER EXEMPTION; 
LIMITED EXEMPTION FOR FOREIGN PRIVATE 
FUND ADVISERS; LIMITED INTRASTATE EX-
EMPTION. 
Section 203(b) of the Investment Advisers Act of 1940 
(15 U.S.C. 80b-3(b)) is amended— 
(1) in paragraph (1), by inserting ‘‘, except an 
investment adviser who acts as an investment adviser 
to any private fund,’’ after ‘‘any investment adviser’’; 
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(2) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) any investment adviser that is a foreign 
private fund adviser;’’; 
(3) in paragraph (5), by striking ‘‘or’’ at the 
end; 
(4) in paragraph (6)— 
(A) in subparagraph (A), by striking ‘‘or’’; 
(B) in subparagraph (B), by striking the 
period at the end and adding ‘‘; or’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) a private fund; or’’; and 
(5) by adding at the end the following: 
‘‘(7) any investment adviser who solely advises— 
‘‘(A) small business investment companies 
licensed under the Small Business Investment 
Act of 1958; 
‘‘(B) entities that have received from the 
Small Business Administration notice to proceed 
to qualify for a license, which notice or license 
has not been revoked; or 
‘‘(C) applicants, related to one or more li-
censed small business investment companies cov-
ered in subparagraph (A), that have applied for 
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another license, which application remains pend-
ing.’’. 
SEC. 4. COLLECTION OF SYSTEMIC RISK DATA. 
Section 204 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-4) is amended— 
(1) by redesignating subsections (b) and (c) as 
subsections (c) and (d), respectively; and 
(2) by inserting after subsection (a) the following 
new subsection: 
‘‘(b) RECORDS AND REPORTS OF PRIVATE FUNDS.— 
‘‘(1) IN GENERAL.—The Commission is author-
ized to require any investment adviser registered 
under this Act to maintain such records of and file 
with the Commission such reports regarding private 
funds advised by the investment adviser as are nec-
essary or appropriate in the public interest and for 
the protection of investors or for the assessment of sys-
temic risk as the Commission determines in consulta-
tion with the Board of Governors of the Federal Re-
serve System. The Commission is authorized to pro-
vide or make available to the Board of Governors of 
the Federal Reserve System, and to any other entity 
that the Commission identifies as having systemic 
risk responsibility, those reports or records or the in-
formation contained therein. The records and reports 
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of any private fund, to which any such investment 
adviser provides investment advice, maintained or 
filed by an investment adviser registered under this 
Act, shall be deemed to be the records and reports of 
the investment adviser. 
‘‘(2) REQUIRED INFORMATION.—The records and 
reports required to be maintained or filed with the 
Commission under this subsection shall include, for 
each private fund advised by the investment ad-
viser— 
‘‘(A) the amount of assets under manage-
ment; 
‘‘(B) the use of leverage (including off-bal-
ance sheet leverage); 
‘‘(C) counterparty credit risk exposures; 
‘‘(D) trading and investment positions; 
‘‘(E) trading practices; and 
‘‘(F) such other information as the Commis-
sion, in consultation with the Board of Gov-
ernors of the Federal Reserve System, determines 
necessary or appropriate in the public interest 
and for the protection of investors or for the as-
sessment of systemic risk. 
‘‘(3) OPTIONAL INFORMATION.—The Commission 
may require the reporting of such additional informa-
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tion from private fund advisers as the Commission 
determines necessary. In making such determination, 
the Commission, taking into account the public inter-
est and potential to contribute to systemic risk, may 
set different reporting requirements for different class-
es of private fund advisers, based on the particular 
types or sizes of private funds advised by such advis-
ers. 
‘‘(4) MAINTENANCE
OF
RECORDS.—An invest-
ment adviser registered under this Act is required to 
maintain and keep such records of private funds ad-
vised by the investment adviser for such period or pe-
riods as the Commission, by rule or regulation, may 
prescribe as necessary or appropriate in the public 
interest and for the protection of investors or for the 
assessment of systemic risk. 
‘‘(5) EXAMINATION OF RECORDS.— 
‘‘(A) PERIODIC
AND
SPECIAL
EXAMINA-
TIONS.—All records of a private fund main-
tained by an investment adviser registered under 
this Act shall be subject at any time and from 
time to time to such periodic, special, and other 
examinations by the Commission, or any mem-
ber or representative thereof, as the Commission 
may prescribe. 
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‘‘(B) AVAILABILITY OF RECORDS.—An in-
vestment adviser registered under this Act shall 
make available to the Commission or its rep-
resentatives any copies or extracts from such 
records as may be prepared without undue effort, 
expense, or delay as the Commission or its rep-
resentatives may reasonably request. 
‘‘(6) INFORMATION SHARING.—The Commission 
shall make available to the Board of Governors of the 
Federal Reserve System, and to any other entity that 
the Commission identifies as having systemic risk re-
sponsibility, copies of all reports, documents, records, 
and information filed with or provided to the Com-
mission by an investment adviser under this sub-
section as the Board, or such other entity, may con-
sider necessary for the purpose of assessing the sys-
temic risk of a private fund. All such reports, docu-
ments, records, and information obtained by the 
Board, or such other entity, from the Commission 
under this subsection shall be kept confidential in a 
manner consistent with confidentiality established by 
the Commission pursuant to paragraph (8). 
‘‘(7) DISCLOSURES OF CERTAIN PRIVATE FUND 
INFORMATION.—An investment adviser registered 
under this Act shall provide such reports, records, and 
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other documents to investors, prospective investors, 
counterparties, and creditors, of any private fund ad-
vised by the investment adviser as the Commission, 
by rule or regulation, may prescribe as necessary or 
appropriate in the public interest and for the protec-
tion of investors or for the assessment of systemic risk. 
‘‘(8) CONFIDENTIALITY OF REPORTS.—Notwith-
standing any other provision of law, the Commission 
shall not be compelled to disclose any report or infor-
mation contained therein required to be filed with the 
Commission under this subsection. Nothing in this 
paragraph shall authorize the Commission to with-
hold information from the Congress or prevent the 
Commission from complying with a request for infor-
mation from any other Federal department or agency 
or any self-regulatory organization requesting the re-
port or information for purposes within the scope of 
its jurisdiction, or complying with an order of a court 
of the United States in an action brought by the 
United States or the Commission. For purposes of sec-
tion 552 of title 5, United States Code, this para-
graph shall be considered a statute described in sub-
section (b)(3)(B) of such section.’’. 
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SEC. 5. ELIMINATION OF DISCLOSURE PROVISION. 
Section 210 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-10) is amended by striking subsection (c). 
SEC. 6. EXEMPTION OF AND REPORTING BY VENTURE CAP-
ITAL FUND ADVISERS. 
Section 203 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(l) EXEMPTION OF AND REPORTING BY VENTURE 
CAPITAL FUND ADVISERS.—The Commission shall identify 
and define the term ‘venture capital fund’ and shall provide 
an adviser to such a fund an exemption from the registra-
tion requirements under this section (excluding any such 
fund whose adviser is exempt from registration pursuant 
to paragraph (7) of subsection (b)). The Commission shall 
require such advisers to maintain such records and provide 
to the Commission such annual or other reports as the Com-
mission determines necessary or appropriate in the public 
interest or for the protection of investors.’’. 
SEC. 7. EXEMPTION OF AND REPORTING BY CERTAIN PRI-
VATE FUND ADVISERS. 
Section 203 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3), as amended by section 6, is further amended 
by adding at the end the following new subsections: 
‘‘(m) EXEMPTION OF AND REPORTING BY CERTAIN 
PRIVATE FUND ADVISERS.— 
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‘‘(1) IN GENERAL.—The Commission shall pro-
vide an exemption from the registration requirements 
under this section to any investment adviser of pri-
vate funds, if each of such private funds has assets 
under management in the United States of less than 
$150,000,000. 
‘‘(2) REPORTING.—The Commission shall require 
investment advisers exempted by reason of this sub-
section to maintain such records and provide to the 
Commission such annual or other reports as the Com-
mission determines necessary or appropriate in the 
public interest or for the protection of investors. 
‘‘(n) REGISTRATION AND EXAMINATION OF MID-SIZED 
PRIVATE FUND ADVISERS.—In prescribing regulations to 
carry out the requirements of this section with respect to 
investment advisers acting as investment advisers to mid- 
sized private funds, the Commission shall take into account 
the size, governance, and investment strategy of such funds 
to determine whether they pose systemic risk, and shall pro-
vide for registration and examination procedures with re-
spect to the investment advisers of such funds which reflect 
the level of systemic risk posed by such funds.’’. 
SEC. 8. CLARIFICATION OF RULEMAKING AUTHORITY. 
Section 211 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-11) is amended— 
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(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) The Commission shall have authority from time 
to time to make, issue, amend, and rescind such rules and 
regulations and such orders as are necessary or appropriate 
to the exercise of the functions and powers conferred upon 
the Commission elsewhere in this title, including rules and 
regulations defining technical, trade, and other terms used 
in this title. For the purposes of its rules and regulations, 
the Commission may— 
‘‘(1) classify persons and matters within its ju-
risdiction based upon, but not limited to— 
‘‘(A) size; 
‘‘(B) scope; 
‘‘(C) business model; 
‘‘(D) compensation scheme; or 
‘‘(E) potential to create or increase systemic 
risk; 
‘‘(2) prescribe different requirements for different 
classes of persons or matters; and 
‘‘(3) ascribe different meanings to terms (includ-
ing the term ‘client’, except the Commission shall not 
ascribe a meaning to the term ‘client’ that would in-
clude an investor in a private fund managed by an 
investment adviser, where such private fund has en-
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tered into an advisory contract with such adviser) 
used in different sections of this title as the Commis-
sion determines necessary to effect the purposes of this 
title.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(e) The Commission and the Commodity Futures 
Trading Commission shall, after consultation with the 
Board of Governors of the Federal Reserve System, within 
12 months after the date of enactment of the Private Fund 
Investment Advisers Registration Act of 2009, jointly pro-
mulgate rules to establish the form and content of the re-
ports required to be filed with the Commission under sec-
tions 203(l) and 204(b) and with the Commodity Futures 
Trading Commission by investment advisers that are reg-
istered both under the Investment Advisers Act of 1940 (15 
U.S.C. 80b-1 et seq.) and the Commodity Exchange Act (7 
U.S.C. 1 et seq.).’’. 
SEC. 9. GAO STUDY. 
(a) STUDY REQUIRED.—The Comptroller General of 
the United States shall carry out a study to assess the an-
nual costs on industry members and their investors due to 
the registration requirements and ongoing reporting re-
quirements under this Act and the amendments made by 
this Act. 
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(b) REPORT TO THE CONGRESS.—Not later than the 
end of the 2-year period beginning on the date of the enact-
ment of this Act, the Comptroller General of the United 
States shall submit a report to the Congress containing the 
findings and determinations made by the Comptroller Gen-
eral in carrying out the study required under subsection 
(a). 
SEC. 10. EFFECTIVE DATE; TRANSITION PERIOD. 
(a) EFFECTIVE DATE.—This Act, and the amendments 
made by this Act, shall take effect with respect to investment 
advisers after the end of the 1-year period beginning on the 
date of the enactment of this Act. 
(b) TRANSITION PERIOD.—The Securities and Ex-
change Commission shall prescribe rules and regulations to 
permit an investment adviser who will be required to reg-
ister with the Securities and Exchange Commission by rea-
son of this Act with the option of registering with the Secu-
rities and Exchange Commission before the date described 
under subsection (a). 
SEC. 11. QUALIFIED CLIENT STANDARD. 
Section 205(e) of the Investment Advisers Act of 1940 
(15 U.S.C. 80b-5(e)) is amended by adding at the end the 
following: ‘‘With respect to any factor used by the Commis-
sion in making a determination under this subsection, if 
the Commission uses a dollar amount test in connection 
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with such factor, such as a net asset threshold, the Commis-
sion shall, not later than one year after the date of the en-
actment of the Private Fund Investment Advisers Registra-
tion Act of 2009, and every 5 years thereafter, adjust for 
the effects of inflation on such test. Any such adjustment 
that is not a multiple of $1,000 shall be rounded to the 
nearest multiple of $1,000.’’. 
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Union Calendar No. 407 
111TH CONGRESS 
2D SESSION 
H. R. 3818 
[Report No. 111–686, Part I] 
A BILL 
To amend the Investment Advisers Act of 1940 to 
require advisers of certain unregistered invest-
ment companies to register with and provide in-
formation to the Securities and Exchange Com-
mission, and for other purposes. 
DECEMBER 17, 2010 
Committee on Agriculture discharged; committed to the 
Committee of the Whole House on the State of the 
Union and ordered to be printed 
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