SEC Staff Provides Guidance on Family Office Registration Rule
The staff of the Division of Investment Management has issued answers to certain questions arising under the new family office rule, which exempts single family offices from adviser registration. Significantly, the responses make clear that merely serving as a family office does not trigger adviser registration so long as the office only provides non-advisory services such as tax filings, accounting, and housekeeping. The responses also state that same-sex domestic partners and opposite sex partners that live together would be considered â€œspousal equivalentsâ€ for purposes of the rule. The responses also address control issues and investments by key employees.
OUR TAKE: Given the wide range of family structures and relationships, we expect the staff to receive many inquiries over time about the contours and limits of various rule provisions.