On January 18, 2012, the Division of Investment Management of the Securities and Exchange Commission (SEC) issued a no-action letter reaffirming its position that certain special purpose vehicles (SPVs) created by a registered investment adviser are not required to separately register as an investment adviser (No-Action Letter).

The No-Action Letter was issued in response to correspondence by the American Bar Association’s Subcommittee on Private Investment Entities, which voiced concerns regarding the ability of investment advisers to include related SPVs under a single registration, based on recent amendments to the Investment Advisers Act of 1940 (Advisers Act) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The No-Action Letter confirms that the Dodd-Frank’s repeal of the exemption previously provided by Section 203(b)(3) of the Advisers Act for private advisers with fewer than 15 clients does not change the SEC’s position regarding SPVs.

Source: Investment Management Alert
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