Regulatory Update for SEC Advisers

As many of you know the SEC is adopting new rules and regulations for investment advisers at a fairly rapid pace. I thought you might want a brief synopsis of some of the new rules. They can be found below along with links to the final rules. Please feel free to contact us with any questions.

1. Discussion of the SEC's Large Trader Release: On July 26, 2011, the SEC adopted a new rule establishing large trader reporting requirements to enhance the agency’s ability to identify large market participants, collect information on their trading, and analyze their trading activity. A “large trader” will be defined as a person whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month. The Rule requires large traders to register with the Commission through a new form, Form 13H whereby the SEC will assign the trader a unique identification number. The Rule also imposes record keeping, reporting, and limited monitoring requirements on certain registered broker-dealers through whom large traders execute their transactions.

http://sec.gov/rules/final/2011/34-64976.pdf

2. Family Office Rule: The SEC recently adopted new Rule 202(a)(11)(G)-1 under the Investment Advisers Act to define the term "Family Office." Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, entities meeting the new definition of "Family Office" will be excluded from the term "investment adviser" under the Investment Advisers Act and, thus, will not be subject to SEC registration and regulation as investment advisers. This update examines the new "Family Office Rule."

http://sec.gov/rules/final/2011/ia-3220.pdf

3. New ADV Part I: The SEC is adopting new rules and rule amendments under the Investment Advisers Act of 1940 to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These rules and rule amendments are designed to give effect to provisions of the Title IV of the Dodd-Frank Act that, among other things, increase the statutory threshold for registration by investment advisers with the Commission, require advisers to hedge funds and other private funds to register with the Commission, and require reporting by certain investment advisers that are exempt from registration.

http://sec.gov/rules/final/2011/ia-3221.pdf