On June 22, the Securities and Exchange Commission (SEC) adopted
a rule exempting from registration and regulation under the
Investment Advisers Act of 1940 (Advisers Act) certain "family
offices."1 The rule implements Section 409 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act. Without
the rule, many family offices would have been forced to register as
investment advisers in light of the repeal of Section 203(b)(3) of
the Advisers Act, the 14-client rule upon which many family offices
relied for exemption from registration. While the SEC significantly
expanded the rule from its proposed form, many of the definitions
remain complicated, and given the widely varying structures of
family offices, some offices may need to restructure their
operations or terminate clients to avoid registration under the
Advisers Act. Family offices that cannot meet the definition of
"family office" are required to be registered with the
SEC as investment advisers by March
