Legislation Proposed by U.S. Treasury Would Require Private Fund Advisers to Register with the SEC

The U.S. Department of the Treasury (Treasury) recently proposed amendments to the Investment Advisers Act of 1940, as amended (Advisers Act) that would effectively require most investment advisers to private pools of investment capital with minimum U.S. contact to register with the Securities and Exchange Commission (SEC). If enacted, the proposed legislation would have far-reaching implications for advisers of hedge funds, venture capital funds, private equity funds, and other U.S. and non-U.S. domiciled private pools of investment capital. It also would appear to eliminate the “small adviser exception” for advisers who have fewer than 15 clients and do not hold themselves out to the public as investment advisers.

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