SEC Issues Interpretations of Private Fund Adviser Registration Rules (Hedge Fund Alert)

Certain advisers of private investment funds will be required to register under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), no later than February 1, 2006 to comply with rules adopted by the Securities and Exchange Commission in December 2004 (the "Registration Rules").¹ The staff of the SEC’s Division of Investment Management (the "Staff") recently issued interpretive guidance relating to the Registration Rules that may affect whether a private fund adviser must register. In providing this guidance, the Staff has clarified important aspects of the definition of a "private fund" and other matters relevant to advisers that are determining whether they are required to register. This Hedge Fund Alert highlights the Staff’s latest guidance for private fund advisers affected by the February 1, 2006 deadline, and summarizes additional regulatory issues that should be reviewed by all advisers that are registered with the SEC.