Tailoring for Main Street’s Investors Act

Tailoring for Main Street’s Investors Act would create an exemption from SEC registration under the Investment Advisers Act of 1940 for certain private fund advisers. Specifically, advisers to private funds with US assets under management below $5 billion could qualify if: (1) they advise only private funds, (2) every investor in those funds is either a qualified purchaser, an accredited investor, or an investment professional (subject to SEC determination), and (3) none of the funds offers investors redemption or similar liquidity rights except in extraordinary circumstances. In exchange, exempt advisers would still face recordkeeping and biennial reporting requirements no more burdensome than current practices. The bill also adds a separate package of rules for smaller advisers: it would let entities with less than $1 billion in assets file Form ADV less frequently (no more than once every two years) and require the SEC to create a short-form Form ADV for these small advisers, with a 280-day deadline after enactment to deliver the form.