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Previously, I posted a summary
of the status of state investment advisor registration requirements for private
fund managers in the Northeast in wake of adoption of the Dodd-Frank Act.
Massachusetts currently provides an exemption for investment advisers who
only advise sophisticated clients such as "institutional buyers," which include
any "investing entity whose only investors are accredited investors... each of
whom has invested a minimum of $50,000." In April, the
Massachusetts Securities Division proposed changes to its investment adviser
registration regulations, which would phase out the institutional buyer
exemption and introduce a new "private fund adviser exemption" A public
hearing was held on June 23, 2011. After receiving comments, they revised the
proposed regulations and released new revised proposed regulations on November
2, 2011. Originally, the Massachusetts Securities Division had planned on
having another hearing on December 6, 2011, but this has been postponed until
January 5, 2012. Interested parties will also have the right to introduce
comments until January 6, 2012.
The proposed regulation now make the following changes:
It appears that these regulations are in near final form,
but since the Massachusetts Securities Division is still soliciting
comments and intends to hold a hearing, it is possible that further revisions
may be made. Stay tuned.
 A 3(c)(1) fund is a fund which has under 100
investors. A 3(c)(7) fund is a fund which is limited to qualified
purchasers, which are defined roughly as a person with at least $5 Million in
investment assets or a company with at least $25 Million in investment assets.
Read more articles by Alexander Davie at Strictly Business, a
business law blog for entrepreneurs, emerging companies, and the investment
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