California FPPC Issues New Interpretive Guidance On Placement Agent Legislation

A recently published letter from the California Fair Political Practices Commission (the "Commission") offers additional guidance on the scope and application of California's new placement agent law, Assembly Bill No. 1743 ("AB 1743"). While the letter does not constitute formal guidance from the Commission, it can offer assistance in interpreting AB 1743.

As previously described in a Ropes & Gray alert, under AB 1743, any placement agent who solicits funds from a California public pension or retirement system on behalf of an external manager is required to register as a lobbyist. AB 1743 broadly defines "placement agent" to include any employee of an external manager who acts as a finder, solicitor, marketer, consultant, broker or other intermediary for compensation in connection with the offer or sale of securities, assets or services of the external manager, subject to an exception for employees who spend one-third or more of their time during a calendar year