New Registration Requirements for Non-U.S. Advisers

As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed on July 21, 2010, there have been significant reforms applicable to non-US advisers conducting business in the United States, including new registration requirements under the Advisers Act (the “Act”).

Non-U.S. advisers may need to register with the Securities and Exchange Commission (SEC) in order to conduct future business within the United States. A non-U.S. adviser is defined in the Advisers Act as an investment adviser that:

  • Has no place of business in the United States;
  • Has a total of less than 15 U.S. clients and investors in private funds;
  • Has less than $25 million in assets under management associated with the U.S. clients and investors; and
  • Does not hold itself out generally as a U.S. investment adviser.


The definition of a “place of business” is any office where an adviser regularly communicates with clients and does not include an office that is solely used for administrative services and back-off activities. The Act also gives advisers guidance on how to calculate the number of clients in order to comply with the 15 client maximum rule. The assets under management are determined by the gross number of assets and not the net amount. In other words, the amount of liabilities that the firm has may not be deducted. If an adviser meets these qualifications it will be exempt from all registration requirements imposed by the Advisers Act.

An exemption that a non-U.S. adviser may use is the Private Fund Adviser Exemption. To qualify: (1) the adviser may not have clients in the U.S. except for qualifying private funds and (2) all assets managed at a U.S. place of business must be solely associated with the private fund assets and may not exceed $150 million. These qualifications do not take into account any clients or assets under management outside of the U.S.

A non-U.S. adviser may also use the Venture Capital Fund Adviser Exemption to avoid full registration with the SEC. This exemption is only available to managers who solely manage venture capital funds. The Act lists five conditions that must be met in order to be considered a venture capital fund: (1) it must have a non-qualifying basket; (2) it must use no borrowing/leveraging; (3) it can only provide redemption rights in exceptional circumstances; (4) it is represented as pursing a venture capital strategy; and (5) it is a private fund.

In the event a non-U.S. firm qualifies for one of the previous two exemptions it will be considered an Exempt Reporting Adviser but will still have some obligations under the Act to file certain information with the SEC. Firms must report seven categories of information in Form ADV-Part1A that include identifying information, information about the exemption being used, form of organization, other business activities, financial industry affiliations and private fund reporting, control persons, disclosure information, and schedules. The firms must file this form annually, 90 days before the end of the fiscal year and they must file prompt amendments if certain information becomes inaccurate.


Parker MacIntyre provides legal and compliance services to registered private funds, investment advisers and broker dealers. Among other things, we advise firms regarding registration procedures, exemptions from registration, and reporting requirements.