117 HR 4620 IH: To amend the Investment Advisers Act of 1940 to limit the exemption provided for family offices from the definition of an investment adviser, and for other purposes. U.S. House of Representatives 2021-07-22 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I117th CONGRESS1st SessionH. R. 4620IN THE HOUSE OF REPRESENTATIVESJuly 22, 2021Ms. Ocasio-Cortez introduced the following bill; which was referred to the Committee on Financial ServicesA BILLTo amend the Investment Advisers Act of 1940 to limit the exemption provided for family offices from the definition of an investment adviser, and for other purposes.

1.

Regulation of family offices

(a)

Family office size limitation

Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)) is amended—(1)in paragraph (11), by striking ;; (G) any family office, as defined by rule, regulation, or order of the Commission, in accordance with the purposes of this title and inserting ; (G) any covered family office;(2)by redesignating the second paragraph (29) as paragraph (31); and(3)by adding at the end the following: (32)

Covered family office

(A)

In general

The term covered family office means a family office with less than $750,000,000 in assets under management.(B)

Rulemaking

The Commission shall further define the term covered family office, by rule, in accordance with the purposes of this title. In issuing such rule, the Commission—(i)shall exclude any person who is subject to a final order described in section 15(b)(4)(H) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)(H)); and(ii)may include a family office with fewer assets under management than the threshold described under subparagraph (A), if the Commission, by rule, determines the family office is highly leveraged or engaged in high-risk activities that the Commission determines warrants inclusion, as appropriate to protect investors. .(b)

Exemption of and reporting by covered family offices

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3) is amended by adding at the end the following:(o)

Exemption of and reporting by covered family offices

(1)

In general

The Commission may provide an exemption from the registration requirements under this section to any covered family office.(2)

Reporting

The Commission shall require investment advisers exempted by reason of this subsection to maintain such records and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors. .(c)

Removal of grandfather provision

Section 409 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 80b–2 note) is amended—(1)in subsection (b)—(A)in paragraph (1), by adding and at the end;(B)in paragraph (2), by striking ; and and inserting a period; and(C)by striking paragraph (3); and(2)by striking subsection (c).