Electronic Code of Federal Regulations (e-CFR)

Chapter II. SECURITIES AND EXCHANGE COMMISSION

Part 275. RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940

Section 275.203(m)-1. Private fund adviser exemption.

17 CFR 275.203(m)-1 – Private fund adviser exemption.

275.203(m)-1 Private fund adviser exemption.

(a)United States investment advisers.For purposes of section 203(m) of the Act (15 U.S.C. 80b-3(m)), an investment adviser with its principal office andis exempt from the requirement to register under section 203 of the Act if the investment adviser:

(1)Acts solely as an investment adviser to one or more qualifying private funds; and

(2)Manages private fund assets of less than $150 million.

(b)Non-United States investment advisers.For purposes of section 203(m) of the Act (15 U.S.C. 80b-3(m)), an investment adviser with its principal office andplace of businessoutside of the United States is exempt from the requirement to register under section 203 of the Act if:

(1)The investment adviser has no client that is a United States person except for one or more qualifying private funds; and

(2)All assets managed by the investment adviser at aare solely attributable to private fund assets, the total value of which is less than $150 million.

(c)Frequency of Calculations.For purposes of this section, calculate private fund assets annually, in accordance with General Instruction 15 to Form ADV ( 279.1of this chapter).

(1)Assets under managementmeans the regulatoryassets under managementas determined under Item 5.F of Form ADV ( 279.1of this chapter) except that the regulatoryassets under managementattributable to a private fund that is an entity described in subparagraph (A), (B), or (C) of section 203(b)(7) of the Act (15 U.S.C. 80b-3(b)(7)) (other than an entity that has elected to be regulated or is regulated as abusiness development companypursuant to section 54 of theInvestment Company Act of 194015 U.S.C. 80a-53)) shall be excluded from the definition ofassets under managementfor purposes of this section.

(2)Place of businesshas the same meaning as in 275.222-1(a).

(3)Principal office and place of businessof an investment adviser means the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser.

(4)Private fund assetsmeans the investment advisersassets under managementattributable to a qualifying private fund.

(5)Qualifying private fundmeans any private fund that is not registered under section 8 of theInvestment Company Act of 194015 U.S.C. 80a-8) and has not elected to be treated as abusiness development companypursuant to section 54 of that Act (15 U.S.C. 80a-53). For purposes of this section, an investment adviser may treat as a private fund anissuerthat qualifies for an exclusion from the definition of an investment company, as defined in section 3 of theInvestment Company Act of 194015 U.S.C. 80a-3), in addition to those provided by section 3(c)(1) or 3(c)(7) of that Act (15U.S.C.80a-3(c)(1)or15U.S.C. 80a-3(c)(7)), provided that the investment adviser treats theissueras a private fund under the Act (15 U.S.C. 80b) and the rules thereunder for all purposes.

(6)Related personhas the same meaning as in 275.206(4)-2(d)(7).

(7)United Stateshas the same meaning as in 230.902(l)of this chapter.

(8)United States personmeans any person that is a U.S. person as defined in 230.902(k)of this chapter, except that any discretionary account or similar account that is held for the benefit of a United States person by a dealer or other professional fiduciary is a United States person if the dealer or professional fiduciary is a related person of the investment adviser relying on this section and is not organized, incorporated, or (if an individual) residentin the United States.

A client will not be considered a United States person if the client was not a United States person at the time of becoming a client.