SEC Proposes New "Family Office" Definition Under Dodd-Frank Act

The Securities and Exchange Commission (SEC) has proposed a definition of "family office" for purposes of the Investment Advisers Act of 1940 (the "Act"), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The new definition, once final, will identify those family offices that will be exempt from federal investment adviser registration and regulation when certain amendments to the Act become effective on July 21, 2011 . As of that date, the "fewer than 15 clients" exemption upon which many family offices currently rely will no longer be available. Comments are invited by the SEC on the proposed "family office" definition though November 18, 2010.