Virginia Adopts Private Fund Adviser Exemption

Private fund advisers are exempt from investment adviser registration requirements in Virginia if neither the advisers nor their advisory affiliates are subject to “bad boy” disqualification provisions under Rule 262 of federal Regulation A, and the advisers electronically file through the IARD the SEC-filed reports and amendments required for exempt reporting advisers by Rule 204-4 of the Investment Advisers Act of 1940, as well as a $250 fee. The exemption takes  effect when the reports and fee are filed and accepted by the IARD on the State’s behalf, assuming the exemption’s other conditions are met. NOTES: (1) Investment adviser representatives employed by or associated with exemption-eligible investment advisers are, themselves, exempt from investment adviser representative registration if they do not otherwise act as investment adviser representatives; (2) Investment advisers that become ineligible for the private fund adviser exemption must, within 90 days following their ineligibility, register or notice file as investment advisers (as applicable) in Virginia; and (3) Federal covered investment advisers, i.e., private fund advisers registered with the SEC, are ineligible for the exemption and, therefore, must comply with Virginia notice filing requirements.