Introduction
On June 22, 2011, the Securities and Exchange Commission (the "SEC") adopted rules, rule amendments and amendments to Form ADV (the "New Rules") under the Investment Advisers Act of 1940 (the "Advisers Act") to implement Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").
The New Rules were not adopted without some controversy. Two of the five SEC Commissioners voted against adopting new rules and amendments to register hedge fund and private fund advisers, and to impose reporting requirements on funds exempt from registration, arguing that the regulatory burdens of the new reporting requirements on venture capital advisers who are exempt from registration are too heavy, are contrary to congressional intent and would negatively impact capital formation. The SEC Commissioners unanimously voted to adopt rules to implement registration exemptions for venture capital fund advisers, advisers to private funds with less than $100 million in assets under management ("AUM") in the United States, and certain foreign advisers. The SEC Commissioners also unanimously voted to adopt a new rule defining "family offices" that are exempt from registration under the Advisers Act.