On November 15, 2012, the SEC’s Division of Investment Management released guidance on the exemption from registration under the Advisers Act provided by Section 203(b)(6)(B) of the Advisers Act for investment advisers that are registered with the CFTC as a CTA and advise a private fund (i.e., a 3(c)(1) or 3(c)(7) fund). The exemption under Section 203(b)(6)(B) was added to the Advisers Act by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).

As amended by the Dodd-Frank Act, Section 203(b)(6) of the Advisers Act contains two sections, Section 203(b)(6)(A) and Section 203(b)(6)(B), that exempt certain investment advisers that are registered with the CFTC as CTAs from registration with the SEC as an investment adviser. Section 203(b)(6)(A) exempts from registration any such CFTC-registered investment adviser whose business does not consist primarily of acting as an investment adviser (as defined in Section 202(a)(11) of the Advisers Act) and who does not act as an investment adviser to (i) an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or (ii) a company that has elected to be treated as a business development company under Section 54 of the Investment Company Act and has not withdrawn its election. Section 203(b)(6)(B) exempts from registration any investment adviser that is registered with the CFTC as a CTA and that advises a private fund, so long as after the date of enactment of Title IV of the Dodd-Frank Act (the Private Fund Investment Advisers Registration Act of 2010), the business of such investment adviser does not become predominately the provision of securities-related advice.

The SEC’s guidance clarified that the exemption under Section 203(b)(6)(B) is not available to a CFTCregistered investment adviser that advises a private fund if (i) such investment adviser also advises a registered investment company or a business development company or (ii) such investment adviser’s business was prior to the enactment of the Dodd-Frank Act, and remains, predominately the provision of securities-related advice.