The SEC released on June 22, 2011 its final Rule 202(a)(11)(G)-1 exempting “family offices” from registration under the Investment Advisers Act of 1940. In order to qualify for the exemption, a family office adviser must: (1) only advise “family clients” with respect to securities; (2) be wholly-owned by “family clients” and exclusively controlled by “family members;” and (3) not hold itself out to the public as an investment adviser. Key to the application of the exemption is the scope of the definition of the term “family clients,” which includes family members, former family members, certain key employees, charities funded by family clients, revocable trusts of family clients, irrevocable trusts where family clients are the only current beneficiaries, estates of family members and key employees, and entities wholly owned by family members.

For more information, see Proskauer Client Alert, “SEC Releases Final Rule Exempting Family Offices,” June 29, 2011, available here.