Tailoring for Main Street’s Investors Act

This bill eases rules for certain investment advisers who manage private funds. If an adviser only works with private funds, manages under $5 billion in U.S. assets, and takes money only from qualified purchasers, accredited investors, or licensed investment professionals (if the SEC allows), the adviser would not have to register with the SEC. These funds also can’t let investors routinely cash out; withdrawals would only be allowed in rare, extraordinary situations. Even with the exemption, the SEC would still require records and a report every two years, but not more paperwork than similar existing rules allow.

It also cuts paperwork for smaller firms. Any adviser that must file Form ADV and has under $1 billion in assets would only need to file it at most once every two years, starting on the date the bill becomes law. The SEC would also have 280 days to create a shorter version of Form ADV that these smaller firms could use.

Key points

• Who is affected: Private fund advisers under $5 billion; advisers under $1 billion for Form ADV rules.
• What changes: Some advisers wouldn’t need to register; exempt advisers file a report every two years; smaller firms file Form ADV no more than once every two years; a short Form ADV will be created.
• When: Reduced Form ADV filing starts on the date of enactment; the short form is due within 280 days; the SEC is directed to set up the exemption.