In a letter to the president of the North American Securities Administrators Association, the Associate Director of the U.S. Securities and Exchange Commission (the “Commission”) Division of Investment Management, Robert E. Plaze, stated that although the Commission’s staff anticipates that the implementing rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) will be completed by July 21, 2011, the staff expects that the Commission will consider providing additional time for investment advisers to comply with certain provisions of the Dodd-Frank Act. To access the full text of the letter, please click here.
Under Section 403 of the Dodd-Frank Act, many investment advisers who currently rely on the private adviser exemption provided in Section 203(b)(3) of the Investment Advisers Act of 1940, as amended, would have to register with the Commission as an investment adviser by July 21, 2011. Mr. Plaze has indicated that “given the time needed for advisers to register and come fully into compliance,” the Commission’s staff expects “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.”
Similarly, Mr. Plaze has indicated that because re-programming of the Investment Adviser Registration Depository system will not be completed until the end of the year, the Commission is expected to consider extending the date by which “mid-sized advisers” (certain advisers having between $25 million and $100 million of assets under management) must transition to state registration in accordance with Section 410 of the Dodd-Frank Act. If this deadline is extended, advisers that are registered with the Commission will be required to report their eligibility for registration with the Commission in the first quarter of 2012, and mid-sized advisers that are no longer eligible for Commission registration will “have a grace period providing them time to register with the appropriate state regulators and come into compliance with state law before withdrawing their Commission registration.”