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In our June 23 Dechert OnPoint, we provided a summary of the rules, rule amendments and Form ADV amendments adopted by the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended (“Advisers Act”), to implement provisions of Title IV of the Dodd-Frank Act regarding the registration of investment advisers with the SEC. This update provides a more comprehensive analysis.
Effective July 21, 2011, the Dodd-Frank Act eliminates Section 203(b)(3) of the Advisers Act (the “private adviser exemption”), an exemption that many advisers to private funds and certain other clients have relied on to avoid registration with the SEC under the Advisers Act. This update reviews the new rules that, among other things, establish new exemptions from SEC registration and reporting requirements for certain advisers, reallocate regulatory responsibility for advisers between the SEC and the states, and extend the compliance date to March 30, 2012 for registration of advisers that would have relied on the private adviser exemption. As these actions will significantly impact many advisers, whether or not they are currently registered with the SEC, advisers are encouraged to review this update and the new rules.