SEC Adopts Family Office Definition

Simon Riveles Uncategorized

On June 22, 2011, SEC adopted proposed rules relating to the definition of family offices under the Advisers Act, as set forth in Dodd-Frank. Historically, family offices have not been required to register with the SEC under the Advisers Act because of an exemption provided to investment advisers with fewer than 15 clients. Dodd-Frank removed that exemption in order to enable the SEC to regulate hedge fund and other private fund advisers, but included a new provision requiring the SEC to define family offices in order to exempt them from regulation under the Advisers Act. As now defined a family office: (i) provides investment advice only to family members, as defined by the rule; certain key employees; charities and trusts established by family members; and entities wholly owned and controlled by family members; (ii) is wholly owned and controlled by family members, and; (iii) does not hold itself out to the public as an investment adviser. Attached please find the SEC’s final rule regarding family offices.

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