CLIENT UPDATE - SEC Extends Time-Frame for Compliance with Registration Requirements for Private Fund Advisers

On June 22, 2011, the U. S. Securities and Exchange Commission (the "SEC") held an open meeting at which it adopted various rules relating to the registration of advisers to private funds in order to fulfill various of its rulemaking requirements under Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Prior to the enactment of the Dodd-Frank Act in July 2010, many advisers to private equity funds and hedge funds were exempt from registration with the SEC based upon Section 203(b)(3) of the Investment Advisers Act of 1940, which exempted advisers with fewer than 15 clients in the past 12 months (the "Private Advisor Exemption"). Effective as of July 21, 2011, the Dodd-Frank Act repealed the Private Adviser Exemption, requiring many advisers to become registered for the first time. Under the rules adopted at this meeting, however, the SEC has extended the time-frame for compliance with the new registration regime by allowing advisers to continue to rely upon the Private Adviser Exemption until March 30, 2012, at which time such advisers will need to register unless another exemption is applicable to them.