Congressman Jim Himes (D-CT) and Congressman Robert Hurt (R-VA) recently introduced legislation (H.R. 1105) in the House of Representatives to amend the Advisers Act to create an exemption from registration and reporting requirements for advisers to private equity funds. Very generally, the legislation proposes to create an exemption to registration for advisers to private equity funds so long as any fund managed by the adviser does not have outstanding debt in excess of two times invested capital commitments. The legislation further provides for the SEC to issue final rules with respect to this exemption (including a definition of “private equity fund”) within six months after the legislation is adopted.

While this legislation was passed by the full House Financial Services Committee, it still faces substantial hurdles before being passed, including passage by the Senate and Presidential veto. While we do not expect any changes in private equity fund adviser registration requirements in the near future, we will keep you apprised if this legislation moves forward.