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Timestamp: 2017-09-20 11:31:01
Document Index: 391639166

Matched Legal Cases: ['§203', '§203', '§203', '§3', '§3', '§203', '§203', '§203', '§203', '§203']

Guide to Investment Adviser Registration | Katten Muchin Rosenman LLP - JDSupra
On June 22, the SEC adopted rules defining three new exemptions from investment adviser registration mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. These exemptions were discussed in detail in our July 28 Client Advisory Summary and Analysis of Dodd-Frank Rules for Investment Advisers. The purpose of this Advisory is to provide easy-to-use guidance to assist U.S. based and Non-U.S. based investment advisers in making preliminary assessments of whether SEC or state registration likely will be required or permitted.
ADVISERS ORGANIZED IN THE UNITED STATESPrincipal Office and Place of Business of AdviserType of Accounts ManagedU.S. Place of BusinessDomicile of Investors/ClientsAggregate RAUM of all Accounts1 Registration ConclusionU.S.Private funds2 only (regardless of domicile of the funds).YesU.S. and/or Non-U.S.< $150 millionExempt reporting under §203(m) as “private fund adviser.” Potential state registration required (unless proposed NASAA exemption adopted by state).3 U.S.Private funds2 only (regardless of domicile of the funds).YesU.S. and/or Non-U.S.≥ $150 millionSEC registration required under §203(a).U.S.Venture capital funds only.N/AU.S. and/or Non-U.S.N/AExempt reporting under §203(l) as “venture capital fund adviser.” Potential state registration required (unless proposed NASAA exemption adopted by state).3U.S. (other than WY and NY)4 Managed accounts only or private funds2 and managed accounts.YesU.S. and/or Non-U.S.≥ $25 million and < $100 millionState registration required if adviser meets minimum threshold for number of clients and there is no institutional exemption available; otherwise, SEC registration required.U.S. (other than WY and NY)4Managed accounts only or private funds2 and managed accounts.YesU.S. and/or Non-U.S.≥ $100 million SEC registration permitted (mandatory if RAUM > $110 million). SEC registration must be withdrawn if RAUM falls below $90 million.U.S. domiciled in WY4Managed accounts only or private funds2 and managed accounts.YesU.S. and/or Non-U.S. > $0 SEC registration required. No qualifying state registration regime.U.S. domiciled in NY4Managed accounts only or private funds2 and managed accounts.YesU.S. and/or Non-U.S. ≥ $25 millionSEC registration required. No qualifying state registration regime. SEC registration must be withdrawn if RAUM falls below $25 million.Symbols: < less than; > greater than; ≥ greater than or equal to.1 Regulatory Assets Under Management (RAUM) is gross assets in “securities portfolios” and private funds for which the adviser provides continuous and regular supervisory or management services. Must include assets attributable to clients, whether U.S. or Non-U.S., proprietary assets, generally assets managed without compensation and uncalled capital commitments.2 “Private fund” means a fund excluded from the definition of investment company by §3(c)(1) or §3(c)(7) of the Investment Company Act of 1940; advisers to funds relying on other exclusions from the definition of investment company may elect to treat those funds as private funds.3 NASAA has proposed, but has not yet adopted, a model rule governing the registration and reporting requirements for advisers to private funds. NASAA’s proposal is designed to follow certain provisions in the Dodd-Frank Act as implemented by the SEC. After adoption by NASAA, individual states must determine whether to adopt such an exemption.4 Each state (other than WY) maintains its own regulatory regime. All WY investment advisers are subject to SEC registration. NY regulates investment advisers but does not have a regular examination program and thus mid-sized advisers (≥ $25 million and < $100 million) in NY must register with the SEC.On June 22, the SEC adopted rules defining three new exemptions from investment adviser registration mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. These exemptions were discussed in detail in our July 28 Client Advisory Summary and Analysis of Dodd-Frank Rules for Investment Advisers. The purpose of this Advisory is to provide easy-to-use guidance to assist U.S.-based and Non-U.S.-based investment advisers in making preliminary assessments of whether SEC or state registration likely will be required or permitted.Guide to Investment Adviser RegistrationSeptember 20115 The information on this chart is also applicable to advisers organized in the United States whose principal office and place of business is outside the United States.6 For this purpose, accounts of Non-U.S. clients that are not private funds should be excluded.7 For this purpose, accounts of all U.S. and Non-U.S. private fund clients managed from the United States should be included. Accounts of Non-U.S. clients that are not private funds should be excluded. Not permitted to have U.S. clients other than private funds.ADVISERS ORGANIZED OUTSIDE OF THE U.S.5Principal Office and Place of Business of AdviserType of Accounts Managed6U.S. Place of BusinessDomicile of Investors/ClientsAggregate RAUM of all Accounts Registration ConclusionNon-U.S.U.S private funds2 only and Non-U.S. client accounts (whether or not private funds).NoU.S. and Non-U.S.N/A Exempt reporting adviser under §203(m) as “private fund adviser.”Non-U.S.Non-U.S. private funds2 and other Non-U.S. client accounts only.NoU.S. and Non-U.S. investors only, no U.S. clients.N/ADependent on facts and circumstances: No U.S. jurisdiction if adviser not using U.S. jurisdictional means in connection with its advisory business. May be exempt from registration and reporting as a “foreign private adviser” if conditions described below are met. Otherwise exempt reporting adviser under §203(m) as “private fund adviser” if sufficient use of U.S. jurisdictional means to fall under U.S. jurisdiction.Non-U.S.U.S. private funds2 only and/or Non-U.S. private funds2 and Non-U.S. client accounts.YesU.S. and Non-U.S.< $150 million7 Exempt reporting under §203(m) as “private fund adviser.”Non-U.S.U.S. and Non-U.S. private funds2 and/or U.S. managed accounts.YesU.S. and Non-U.S.> $0 SEC registration required under §203(a). Non-U.S. U.S. and Non-U.S. private funds2 and/or U.S. managed accounts.NoFewer than 15 U.S. clients and investors in private funds, with less than $25 million in assets attributable to such U.S. clients and investors.< $25 millionExempt under §203(b)(3) as a "foreign private adviser" if not holding itself out to the public in the United States as an investment adviser.Non-U.S.U.S. and Non-U.S. private funds2 and/or U.S. managed accounts.NoU.S. and Non-U.S.> $0 SEC registration required unless qualified to claim the “foreign private adviser” exemption. CHARLOTTE CHICAGO IRVING LONDON LOS ANGELES NEW YORK OAKLAND WASHINGTON, DCPublished as a source of information only. The material contained herein is not to be construed as legal advice or opinion. ©2011 Katten Muchin Rosenman LLP. All rights reserved.Circular 230 Disclosure: Pursuant to regulations governing practice before the Internal Revenue Service, any tax advice contained herein is not intended or written to be used and cannot be used by a taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Katten Muchin Rosenman LLP is an Illinois limited liability partnership including professional corporations that has elected to be governed by the Illinois Uniform Partnership Act (1997). London affiliate: Katten Muchin Rosenman UK LLP. www.kattenlaw.comThis Advisory is not a substitute for legal advice. If you have any specific questions regarding SEC or state investment adviser registration, please contact your Katten Muchin Rosenman LLP attorney or any of the following members of the Financial Services Practice. Henry BregsteinNew York212.940.6615henry.bregstein@kattenlaw.com Wendy E. Cohen New York212.940.3846wendy.cohen@kattenlaw.com Daren R. DominaNew York212.940.6517daren.domina@kattenlaw.com Jack P. Governale New York212.940.8525 jack.governale@kattenlaw.com Ricardo J. HollingsworthNew York212.940.6482ricardo.hollingsworth@kattenlaw.com Joseph IskowitzNew York212.940.6351joseph.iskowitz@kattenlaw.com Marilyn Selby OkoshiNew York212.940.8512marilyn.okoshi@kattenlaw.com Ross PazzolChicago312.902.5554ross.pazzol@kattenlaw.com Fred M. SantoNew York212.940.8720fred.santo@kattenlaw.com Peter J. SheaNew York212.940.6447peter.shea@kattenlaw.com Marybeth SoradyWashington, D.C.202.625.3727marybeth.sorady@kattenlaw.com Meryl E. WienerNew York212.940.8542meryl.wiener@kattenlaw.com Allison C. YackerNew York212.940.6328allison.yacker@kattenlaw.com Lance A. Zinman Chicago312.902.5212lance.zinman@kattenlaw.com