Investment advisors

The regulation of investment advisers is shifting greatly. The Dodd-Frank Wall Street Reform and Consumer Protection Act significantly impact the level of SEC reporting required by some investment advisors.

The Dodd-Frank Act amended the Investment Advisers Act to eliminate the "private adviser" exemption. Unless the adviser's private fund has assets under management of less than $150 million and does not provide advice to anyone else, an investment adviser to a private investment fund must register with the SEC as an investment adviser. These investment advisers can expect enhanced recordkeeping and reporting requirements. In addition, many investment advisers can expect to transition from federal registration to state registration. Investment advisers with less than $100 million assets under management are not permitted to be registered with the SEC unless an investment adviser is required to register in 15 or more states, manages mutual funds or business development companies, or is not required to be registered in its home state.

Porter Wright attorneys stay focused on the regulatory and legal requirements applicable to investment advisers so they can concentrate on advising their clients with respect to investing, purchasing or selling securities. We assist advisers in registering with the SEC and state securities agencies and we are prepared to assist investment advisers in transitioning to state regulation if required by the amended Investor Advisors Act or, for private investment advisers, moving into the myriad of investment adviser regulation. 

In addition, Porter Wright's attorneys assist clients that intend to be operating companies to inadvertently avoid becoming an investment company and being subject to the full regulation of the Investment Company Act of 1940. The Investment Company Act is an all-or-nothing statute that imposes burdensome restrictions on most operating companies. By innocently investing more than 40 percent of their assets in securities, operating companies can cross the arbitrary line for sanctions. We help structure our clients' businesses to mitigate these problems in order to fall within an exemption from registration or, if registration is required, we assist in maneuvering through the complex restrictions and regulation imposed by the Investment Company Act.