Alert December 04, 2012

SEC Staff Provides Guidance on Advisers Act Exemption for CFTC-Registered Investment Advisers

The staff of the SEC’s Division of Investment Management (the “Staff”) has posted to its Investment Management Staff Issues of Interest page on the SEC website interpretive guidance regarding the exemption from registration under the Investment Advisers Act of 1940 (the “Advisers Act’) provided by Section 203(b)(6) of the Act.  The guidance addresses requests for clarification regarding the impact of amendments to this statutory provision effected by the Dodd-Frank Act.  Section 203(b)(6) exempts from the requirement to register with the SEC: “(A) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading advisor whose business does not consist primarily of acting as an investment adviser, as defined in section 202(a)(11) of [the Advisers Act], and that does not act as an investment adviser to (i) an investment company registered under [the Investment Company Act of 1940 (the “1940 Act”)]; or (ii) a company which has elected to be a business development company pursuant to section 54 of [the 1940 Act (a “BDC”)] and has not withdrawn its election; or (B) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading advisor and advises a private fund, provided that, if after the date of enactment of the [Dodd-Frank Act], the business of the advisor should become predominately the provision of securities-related advice, then such adviser shall register with the Commission.”