Fund Advisers: Face New Registration Reporting Regs: SEC Rules, Implementing Dodd-Frank Requirements, Include" Family Office" Exclusions from Investment Advisers Act of 1940

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The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010 marked the onset of major changes for financial advisers. The SEC in June followed through with rulemaking responsibilities under the new law by releasing final rules that include new registration and reporting requirements for advisers to hedge funds and other private funds, and define "family offices" that are excluded from the Investment Advisers Act of 1940.

The rules could mean major new compliance responsibilities for CPAs who specialize in certain areas of personal financial planning.

The first set of rules requires advisers to hedge funds and other private funds to register with the SEC, establishes new exemptions from SEC registration and reporting requirements for certain advisers, and reallocates regulatory responsibility for advisers between the SEC and states. The other set of rules defines "family offices" that are to be excluded from the Investment Advisers Act.

The rules implementing the amendments to the Investment Advisers Act (tinyurl.com/6dqyydl) include a transitional exemption period so that private advisers, including hedge fund and private equity fund advisers, newly required to register do not have to do so until March 30, 2012. The rules regarding exemptions for venture capital fund and certain private fund advisers (tinyurl.com/5r69jye) became effective July 21, 2011. Family offices that do not meet the terms of the exclusion under the new rule (tinyurl.com/ 6888r5j) must register with the SEC or applicable state securities authorities by March 30, 2012.

INVESTMENT ADVISERS ACT AMENDMENTS

In the first set of rules, the SEC also amended rules to expand disclosure by investment advisers, particularly about …