As discussed in previous Foley Advisers dated
January 31, the Massachusetts
Securities Division (the Division) earlier this year adopted new
regulations relating to the regulation of investment advisers. All
investment advisers operating in Massachusetts which are not
currently registered with either the SEC or the Massachusetts
Securities Division must register with the Securities Division by
August 3, 2012, unless they (a) qualify for the new exemption from
registration for advisers solely to private funds or (b) meet
certain limited, strict grandfathering provisions. The Division
will begin enforcing the new registration regulations as of August
Massachusetts based advisers to private
funds may be able to rely upon the new private fund adviser
exemption from registration if such advisers only clients are
3(c)(1) and 3(c)(7) funds, as defined under the Investment Company
Act of 1940 (the Investment Company Act), and the adviser is not
otherwise subject to certain disciplinary disqualifications.
Private fund advisers must also satisfy certain additional
disclosure and audit requirements as set out in the regulations to
be exempt from registration, and will be required to: (i) file with
the state the same reports and amendments as are required by the
U.S. Securities and Exchange Commission (the SEC) of SEC exempt
reporting advisers, and (ii) pay the state a $300 reporting
The filing and fee must be submitted
through the IARD website by August 3.
Massachusetts based advisers who are exempt
reporting advisers ("ERA") with the SEC may also be
required to comply with these requirements. Such advisers should
consult their counsel to determine whether they need to update
their recent ERA filing and IARD account to ensure that
Massachusetts obtains a copy of such filing and the $300 fee by
Non-Massachusetts based advisers should
consult with counsel regarding any recent updates to the
registration requirements and exemptions from registration in the
states where they do business, as many state registration and
exemption requirements are in flux.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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