The House of Representatives recently passed a bipartisan bill, H.R. 1105 (the Bill), that would exempt most private equity fund advisers from registering with the SEC, as currently required under the Dodd-Frank Act. As noted in a previous Ropes & Gray Alert, the Bill proposes to exempt from registration private advisers of funds with outstanding debt that is less than twice the amount of capital that has been committed to and invested by the fund. The Bill was passed 254-159 and was framed by Republicans and some Democrats as a “jobs-creation measure.”
While the Bill was passed by the House of Representatives, it still faces substantial hurdles before being passed, including passage by the Senate. Additionally, the White House issued a statement opposing the Bill as “undermin[ing] advances in investor protection and regulatory oversight” implemented under Dodd-Frank and the SEC Chairman also criticized the Bill at the committee level in June for “narrow[ing] the scope of the commission’s jurisdiction and oversight” of advisers. There is currently no Senate counterpart.
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.