SEC Releases Final Rule Exempting Family Offices

The SEC released on June 22, 2011 its final Rule 202(a)(11)(G)-1 exempting "family offices" from registration under the Investment Advisers Act of 1940. In order to qualify for the exemption, a family office adviser must:

• only advise "family clients" with respect to securities,
• be wholly-owned by "family clients" and exclusively controlled by "family members," and
• not hold itself out to the public as an investment adviser.

Registration Deadline

For advisers that currently rely on the Section 203(b)(3) (i.e., have fewer than 15 clients and do not hold themselves out to the public as an investment adviser), and do not qualify for the family office exemption (or another exemption from registration), such advisers will be required to register by March 30, 2012.