Q&As

For the purposes of applying the foreign private adviser exemption under Rule 202(a)(30) of the Investment Advisers Act of 1940, which includes having fewer than 15 clients in the US, how does one determine whether the beneficiary of a fund counts as a ‘client in the US’?

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Published on LexisPSL on 18/02/2019

The following Banking & Finance Q&A provides comprehensive and up to date legal information covering:

  • For the purposes of applying the foreign private adviser exemption under Rule 202(a)(30) of the Investment Advisers Act of 1940, which includes having fewer than 15 clients in the US, how does one determine whether the beneficiary of a fund counts as a ‘client in the US’?

For the purposes of applying the foreign private adviser exemption under Rule 202(a)(30) of the Investment Advisers Act of 1940, which includes having fewer than 15 clients in the US, how does one determine whether the beneficiary of a fund counts as a ‘client in the US’?

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for DCM lawyers?

With respect to the foreign private adviser exemption for purposes of applying the clients and investors threshold, an adviser generally must count as a client each natural person, managed account, or company that it directly advises.

Under Rule 202(a)(30)–1 of the Investment Advisers Act 1940, a foreign private adviser may deem the following to constitute a single ‘client’:

  1. a natural person, together with such natural person’s minor children (regardless of whether they share the same

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