To amend the Investment Advisers Act of 1940 to limit the exemption provided for family offices from the definition of an investment adviser, and for other purposes.

Bill: 117-hr-4620
Sponsor: full_name: Rep. Ocasio-Cortez, Alexandria [D-NY-14]
Introduced: 2021-07-22
Policy area: Finance and Financial Sector
Subjects: Business records

Financial services and investments

Securities

Small business
Latest action: action_date: 2021-07-29
text: Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 27 - 22.

Summaries:
action_date: 2021-07-22
action_desc: Introduced in House
text: <p>This bill limits the exemption for family offices from the Securities and Exchange Commission's (SEC's) regulations applicable to investment advisers. A family office is a privately held company that manages a single family's wealth. Currently, a family office is generally not considered an investment adviser for purposes of SEC regulation regardless of the amount of managed assets, and is therefore not subject to regulations relating to duties, recordkeeping, and disclosures. </p> <p>The bill limits the exemption to include only family offices with less than $750 million in managed assets. Furthermore, the SEC must exclude from the exemption certain persons subject to a final order regarding fraudulent conduct, among other activities.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 4620 IN THE HOUSE OF REPRESENTATIVES July 22, 2021 Ms. Ocasio-Cortez introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Investment Advisers Act of 1940 to limit the exemption provided for family offices from the definition of an investment adviser, and for other purposes.

1. Regulation of family offices (a) Family office size limitation Section 202(a) of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–2(a) ) is amended— (1) in paragraph (11), by striking ;; (G) any family office, as defined by rule, regulation, or order of the Commission, in accordance with the purposes of this title and inserting ; (G) any covered family office ; (2) by redesignating the second paragraph (29) as paragraph (31); and (3) by adding at the end the following: (32) Covered family office (A) In general The term covered family office means a family office with less than $750,000,000 in assets under management. (B) Rulemaking The Commission shall further define the term covered family office , by rule, in accordance with the purposes of this title. In issuing such rule, the Commission— (i) shall exclude any person who is subject to a final order described in section 15(b)(4)(H) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(b)(4)(H) ); and (ii) may include a family office with fewer assets under management than the threshold described under subparagraph (A), if the Commission, by rule, determines the family office is highly leveraged or engaged in high-risk activities that the Commission determines warrants inclusion, as appropriate to protect investors. . (b) Exemption of and reporting by covered family offices Section 203 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–3 ) is amended by adding at the end the following: (o) Exemption of and reporting by covered family offices (1) In general The Commission may provide an exemption from the registration requirements under this section to any covered family office. (2) Reporting The Commission shall require investment advisers exempted by reason of this subsection to maintain such records and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors. . (c) Removal of grandfather provision Section 409 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 15 U.S.C. 80b–2 note) is amended— (1) in subsection (b)— (A) in paragraph (1), by adding and at the end; (B) in paragraph (2), by striking ; and and inserting a period; and (C) by striking paragraph (3); and (2) by striking subsection (c).