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South Dakota Updates Its Policy on Investment Adviser Registration for Private Fund Managers

Recently, I posted a summary of the status of state investment advisor registration requirements for private fund managers in the Northwest including the state of South Dakota.  On October 24, 2011, the South Dakota Division of Securities issued a revision to their regulations which provide new exemptions from investment adviser registration for those advisers that qualify for the federal private fund adviser exemption or the federal venture capital exemption.  S.D. Admin. R. § 20:08:05:15(2) provides that an investment adviser that meets the exemption requirements as set forth in Sections 203(b), 203(l), or 203(m) of the Investment Advisers Act of 1940 as amended, is also exempt from South Dakota’s investment adviser registration requirement.  Therefore, if an adviser is a private fund manager that is exempt from registration as a result of the private fund adviser exemption or venture capital exemption, it is also exempt from registration with the South Dakota Division of Securities.

As always, you should consult an attorney who is familiar with securities regulatory issues in assessing whether your particular fund management business is required to register under state law.


© 2011 Alexander J. Davie — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Alexander J. Davie

Alexander J. Davie

Alexander Davie is a corporate and securities attorney based in Nashville, Tennessee. Businesses of many varieties rely on his counsel and judgment throughout all stages of their growth. In particular, fund managers and investment management professionals seek the expertise Alex gained when he served as general counsel to a private investment fund. Alex also has significant experience and enjoys working with companies and entrepreneurial ventures, especially within the technology industry. As a believer in technology's ability to enrich people's lives and allowing people to connect with each other in new ways, he is passionate about helping tech startups achieve success. He is active in Nashville's startup community as a mentor at the Nashville Entrepreneur Center and participates in numerous other events geared towards making Nashville a nationally ranked location for starting a business.

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