SEC Proposes Investment Advisers Act Rules to Implement Dodd-Frank Act

The Securities and Exchange Commission ("SEC") has proposed new rules and rule amendments under the Investment Advisers Act of 1940 (the "Advisers Act") to implement certain provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").¹

The Dodd-Frank Act repeals the "private adviser exemption" in section 203(b)(3) of the Advisers Act² and replaces it with narrower exemptions for foreign private advisers, venture capital fund advisers and private fund advisers with less than $150 million in assets under management. The Dodd-Frank Act authorizes the SEC to require registered and certain exempted investment advisers to submit reports as the SEC may require as "necessary or appropriate in the public interest," and reallocates responsibility for oversight of investment advisers by delegating responsibility for those investment advisers that have between $25 and $100 million in assets ("mid-sized advisers") to the states.