Back to Blog June 27, 2011 in

SEC makes long-awaited Dodd-Frank ruling

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As part of the Dodd-Frank Act, Congress eliminated section 203 (b)(3) of the Advisers Act, which previously had exempted from SEC registration any adviser that had fewer than 15 clients over the last 12 months, did not hold itself out to the public as an investment adviser, and did not act as an investment adviser to a registered investment company or a Business Development Company. At the same time, Congress explicitly directed the SEC to exempt advisers to venture capital funds from the new registration requirements. The SEC proposed a rule on November 19, 2010 implementing this exemption. On June 22, 2011, the Commission voted in favor of adopting new rule 203(l)-1 to define “venture capital fund” (VCF) for purposes of the new exemption from registration for investment advisers that advise solely VCFs.

For more information on the definition of VCF and the National Venture Capital Association’s cautiously optimistic position on the ruling, click here.