Thursday, September 01, 2011

Indiana Continues Exemption from IA Registration for Private Equity/Venture Capital Funds

Indiana's exemption from investment adviser or investment adviser representative registration for persons failing to register in the State by virtue of their being exempt from federal investment adviser registration under Section 203(b)(3) of the Investment Advisers Act of 1940 and advising only venture capital companies, will continue by administrative order, effective August 29, 2011, by substituting the new Section 203(l) exemption for venture capital funds for the "Dodd-Frank Act-repealed" Section 203(b)(3) exemption.

Until the Indiana Securities Commissioner adopts final rules on private equity/venture capital funds, as well as on investment adviser registration, no enforcement action will be taken against persons failing to register as investment advisers or representatives in the State if the persons: (1) maintain a place of business in Indiana; (2) do not have more than five client-residents of Indiana during the preceding 12 months; (3) do not hold themselves out generally to the public as investment advisers; and (4) are exempt from federal registration under Section 203(l) of the Investment Advisers Act of 1940, with clients falling within federal Rule 275-203(l)-1 that defines a venture capital fund.