Family Office Exemption Under Dodd-Frank – SEC Releases Final Rule

Who Could Potentially Be Affected?

Persons providing investment advice to families, who may have previously relied on SEC guidance on family offices or on the "fewer-than-15" clients exemption for private advisers (eliminated by the Dodd-Frank Act), will want to determine if the SEC's new rule on "family offices" will provide an exemption from registration under the Investment Advisers Act of 1940.

Summary

Yesterday, the SEC released the final new rule exempting "family offices" from registration under the Advisers Act.  An investment adviser that does not meet the new definition of family office and is of a size to require federal registration will be required to register with the SEC within the next two months, unless the adviser has fewer than 15 clients and does not hold itself out to the public as an investment adviser (or advise an SEC-registered fund or business development company), in which case the adviser will not be required to register with the SEC