OCIE Potentially Extending Routine Inspections To Include Exempt Reporting Advisers

Marc Wyatt, director of the SEC's Office of Compliance Inspections and Examinations ("OCIE"), has indicated that OCIE has begun subjecting exempt reporting advisers to OCIE's routine examination program. His statement – reportedly made at a Nov. 20 meeting of the ABA Hedge Fund Sub-Committee at the ABA Business Law Section Fall Meeting in Washington, D.C. – represents a significant change in OCIE's treatment of exempt reporting advisers.

Exempt reporting advisers are investment advisers that are not required to register with the SEC as an investment adviser because they meet one of two exemptions: the Venture Capital Fund Adviser Exemption or the Private Fund Adviser Exemption (i.e., the exemption relied upon by investment advisers that have less than $150 million of assets under management and advise solely private funds).