Friday, May 15, 2009

House Discusses Bill to Repeal Private Advisor Exemption

The House Committee on Financial Services held a hearing on May 7th which included a discussion of a bill that would repeal Section 203(b)(3) of the Investment Advisers Act of 1940 (the "Private Advisor Exemption"), which exempts investment advisers from SEC registration if they have fewer than 15 clients. The bill, designated H.R. 711: The Hedge Fund Advisor Registration Act (the "Act"), was introduced on January 27, 2009 by Rep. Mike Capuano (D-MA) and Rep. Mike Castle (R-DE) and can be accessed here. If enacted, the Act would subject all investment advisers to SEC registration.