A single family office is seeking an exemption from investment adviser registration even though it may manage a pooled investment vehicle with more than 100 holders. The family office wants to open a pooled vehicle to more than 100 family members to avoid family conflict, but such a vehicle would be deemed a “client” under the Advisers Act, thereby requiring the family office to register. The family office argues against registration because of pre-Dodd-Frank precedent and the policy rationale underlying the registration requirements.
OUR TAKE: The publication of the application generally precedes approval unless somebody objects. This application is good news for family offices who often must artificially contort their structures to avoid registration. It is also good news that the SEC will accept no-action and exemptive precedents that pre-date Dodd-Frank.