SEC Clarifies Registration Requirements for Affiliated Advisers

Simon Riveles Hedge Funds, SEC, Uncategorized

On January 18, 2012, the SEC issued ‘no action’ guidance permitting investment advisers to private funds to include certain affiliated advisers in their Form ADV registration. When a manager advises one or more private funds or certain managed accounts through a structure involving multiple entities such structure will be regarded as a “single advisory business” if such affiliated entities are:

  • subject to a uniform compliance program;
  • advise only private funds and certain separate funds for “qualified clients”;
  • use the same names; and/or
  • hold themselves out as comprising a “single advisory business”

The Staff concluded that no enforcement action would be recommended if only one of the advisers filed a form ADV provided each adviser within the single advisory business complies with each of the following:

  • Each of the filing adviser and relying adviser advises only private funds and certain separate account clients that are “qualified clients.”
  • Each relying adviser, along with its employees and others under its control, would be considered “persons associated with” the filing adviser
  • The filing adviser must have its principal place of business in the U.S., and all the substantive provisions of the Investment Advisers Act would apply to the dealings of the adviser and its affiliates with each of their clients, regardless of whether any client or the filing adviser or relying adviser providing the advice is a “United States person.”
  • The advisory activities of each relying adviser would be subject to the Investment Advisers Act and its rules, and they would be subject to examination by the SEC.
  • A single compliance officer would be responsible for applying a single code of ethics and written compliance policies and procedures to all the relying advisers.
  • The filing adviser discloses in its Form ADV that it and its relying advisers are together filing a single Form ADV in reliance on the staff’s guidance.



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