Section 403 of the Dodd-Frank Wall Street Reform and Consumer Protection Act repeals, as of July 21, the private adviser exemption in Section 203(b)(3) of the Investment Advisers Act of 1940 and will require advisers relying on that exemption (including advisers to many hedge funds and other private funds) to register with the Securities and Exchange Commission.

On April 8, in a letter from SEC Division of Investment Management Associate Director Robert Plaze to the North American Securities Administrators Association, Inc., Mr. Plaze noted that “given the time needed for advisers to register and come fully into compliance with the obligations applicable to them once they are registered, we expect that the Commission will consider extending the date by which these advisers must register and come into compliance with the obligations of a registered adviser until the first quarter of 2012.”

On May 12, in testimony by SEC Chairman Mary Schapiro before the U.S. Senate Committee on Banking, Housing and Urban Affairs, when discussing the impending private fund adviser registration requirement, Chairman Schapiro noted that “Under Title IV of the Dodd-Frank Act, hedge fund advisers and private equity fund advisers will be required to register with the Commission, which is expected to occur in the first quarter of 2012” (emphasis added).

While it is important to note that no official extension has yet been announced, the foregoing SEC letters and testimony, as well as other reported informal discussions between the SEC and industry groups, indicate that the private fund adviser registration deadline is expected to be extended, most likely to the first quarter of 2012.

For a copy of the SEC letter to NASAA, see here.
For a copy of the April 14 Katten Client Advisory discussing the SEC letter, see here.
For a copy of Chairman Schapiro’s testimony, see here.