In a letter dated April 8, 2011, to the President of the North American Securities Administrators Association (“NASAA”),¹ Robert Plaze, Associate Director of the Division of Investment Management of the Securities and Exchange Commission (the “SEC”), stated that the SEC is expecting to adopt final rules implementing various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) applicable to investment advisers by July 21, 2011. To give investment advisers a sufficient amount of time to register (or transition their registrations to applicable state regulatory authorities) and come into compliance with the expanded regulatory requirements, Mr. Plaze stated that the SEC is considering an extension to the registration deadlines applicable to many fund managers until the first quarter of 2012.

The NASAA letter is a significant development for fund managers facing the upcoming compliance deadline of July 21, 2011. Specifically, we note that:

• As a result of the Dodd-Frank Act, the “private adviser exemption” set forth in Section 203(b)(3) of the Investment Advisers Act of 1940, as amended (the exemption relied upon by many hedge fund and private equity fund managers), will not be available after July 21, 2011. To give affected advisers a sufficient amount of time to comply with the new registration and regulatory requirements, the SEC is expected to consider extending the date by which such advisers must register and come into compliance with the expanded regulatory requirements until the first quarter of 2012.
  
  
• With respect to “mid-sized advisers” (advisers having between $25 million and $100 million in assets under management), the SEC is expected to consider extending the date by which such advisers must transition to state registration until the first quarter of 2012.

For additional information regarding the foregoing developments, please contact one of the attorneys listed below.