Virginia Adopts Private Adviser Exemption

The current definition exclusion for investment advisers and federal covered advisers whose only clients are corporations, general partnerships and other entities with assets of at least $5 million was repealed and replaced with an exemption for certain private advisers. Investment advisers and federal covered advisers, as well their employed investment adviser representatives, whose only clients are corporations, general partnerships and other entities with assets of at least $5 million are exempt from registration in Virginia if the clients receive investment advice based on the clients' (entities') investment objectives rather than on their shareholders', partners', beneficiaries' or members' individual investment objectives. Also, the investment advisers must: (1) have been exempt from registration under Section 203(b)(3) of the Investment Advisers Act of 1940 as of July 20, 2011; and (2) be subject to SEC Rule 203-1(e) allowing an exemption from SEC registration until March 30, 2012 for investment advisers formerly exempt by Section 203(b)(3) of the 1940 Act that would otherwise need to register with the SEC by July 21, 2011.