Alert April 12, 2011

Division of Investment Management Suggests Providing Additional Time for Implementation of Changes to Adviser Registration and Compliance Requirements Resulting from Dodd-Frank Act

The SEC has made available on its website a letter from Robert E. Plaze, Associate Director of the SEC’s Division of Investment Management, to the President of the North American Securities Administrators Association.  The letter states that the Division expects the SEC to consider providing additional time for advisers affected by the new registration requirements resulting from the Dodd-Frank Act to come into compliance with those requirements.  Specifically, the letter suggests that the SEC may extend until the first quarter of 2012 the date by which mid-sized advisers must transfer to state regulation.  The letter also notes that while the Division expects to issue final rules regarding new exemptions for advisers to “venture capital” funds and advisers to “private funds” with less than $150 million in assets under management in the United States prior to July 21, 2012 (see the November 24, 2010 Goodwin Procter Client Alert for a discussion of the SEC’s rule proposals regarding those exemptions and related matters), the SEC may extend the date by which those advisers must comply with the obligations of a registered investment adviser under the Investment Advisers Act of 1940 until the first quarter of 2012.  Further action would be required before any possible extension of time is effective.