Investment Advisers Modernization Act of 2016
This bill directs the Securities and Exchange Commission (SEC) to amend specified regulations for investment advisers as they apply to private equity firms and private investment funds.
A specified regulation regarding books and records that investment advisers must maintain shall be amended to declare that an investment adviser is not required to maintain:
The bill revises the disclaimer that, in the case of an investment adviser that is a partnership, an assignment shall not be deemed to result from the death, withdrawal, sale or transfer of minority interests to apply the disclaimer also to minority members, shareholders, for other equity owners of the investment adviser.
The Investment Advisers Act of 1940 is amended to repeal the requirement that advisers organized as partnerships notify the other party to an investment adviser contract every time there is a change in the composition of the partnership.
The SEC shall waive the application of specified antifraud prohibitions to advisers who advertise exclusively to accredited investors, qualified clients, qualified purchasers, or knowledgeable employees.
Another regulation shall declare that an investment adviser is not required to deliver a brochure or brochure supplement to a client that is a limited partnership, limited liability company, or other pooled investment vehicle for which each limited partner, member, or other equity owner has received, before purchasing a security issued by the pooled investment vehicle, a prospectus, private placement memorandum, or other offering document containing (to the extent material to the private fund offering) substantially the same information as would be required by Part 2A or 2B of Form ADV.
The SEC must amend a certain regulation regarding Form PF which registered investment advisers with at least $150 million in private funds assets under management must file with the SEC to report information about the private funds that they manage. This amendment shall state that an investment adviser to a private fund is not required to report any information beyond that which is required by sections 1a and 1b of Form PF unless it is a large hedge fund adviser or a large liquidity fund adviser.
The SEC shall also amend the regulation requiring that client funds and securities of which an investment adviser has custody are verified by actual examination periodically by an independent public accountant. The current "privately offered securities" exemptions from this custody rule must apply to both certificated and uncertificated securities and exempt special purpose vehicles managed by private fund sponsors and co-investment funds that hold only one investment.
The SEC shall amend the proxy voting regulation to waive its application to any voting authority exercised by an investment adviser regarding client securities that are not public securities.
On the other hand, the SEC may not:
This bill shall not apply to advisory services supplied to an investment company registered under the Investment Company Act of 1940.
| Action Date | Type | Text | Source |
|---|---|---|---|
| 2016-09-12 | IntroReferral | Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. | Senate |
| 2016-09-09 | Floor | Motion to reconsider laid on the table Agreed to without objection. | House floor actions |
| 2016-09-09 | Vote | On passage Passed by the Yeas and Nays: 261 - 145 (Roll no. 495). | House floor actions |
| 2016-09-09 | Vote | On motion to recommit with instructions Failed by the Yeas and Nays: 176 - 232 (Roll no. 494). | House floor actions |
| 2016-09-09 | Floor | Considered as unfinished business. (consideration: CR H5244-5246) | House floor actions |
| 2016-09-09 | Floor | POSTPONED PROCEEDINGS - At the conclusion of debate on the Torres motion to recommit, the Chair put the question on adoption of the motion and by voice vote, announced the noes had prevailed. Mrs. Torres demanded the yeas and nays and the Chair postponed further proceedings on the motion to recommit until later in the legislative day. | House floor actions |
| 2016-09-09 | Floor | The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H5244) | House floor actions |
| 2016-09-09 | Floor | DEBATE - The House proceeded with 10 minutes of debate on the Torres motion to recommit with instructions pending a reservation of a point of order. The instructions contained in the motion seek to require the bill to be reported back to the House with an amendment to add at the end of the bill a section pertaining to Report on Emergency Vehicle Response Times of Companies Owned by Private Funds. Subsequently, the reservation was removed. | House floor actions |
| 2016-09-09 | Floor | Mrs. Torres moved to recommit with instructions to the Committee on Financial Services. (consideration: CR H5238-5239, H5244-5245; text: CR H5238-5239) | House floor actions |
| 2016-09-09 | Floor | DEBATE - Pursuant to the provisions of H.Res. 844, the House proceeded with 10 minutes of debate on the Foster amendment. | House floor actions |
| 2016-09-09 | Floor | DEBATE - The House proceeded with one hour of debate on H.R. 5424. | House floor actions |
| 2016-09-09 | Floor | Rule provides for consideration of H.R. 2357 and H.R. 5424. | House floor actions |
| 2016-09-09 | Floor | Considered under the provisions of rule H. Res. 844. (consideration: CR H5230-5239; text of measure as reported in House: CR H5230-5231) | House floor actions |
| 2016-09-09 | Floor | ORDER OF PROCEDURE - Mr. Hurt asked unanimous consent that the question of adopting a motion to recommit on H.R. 5424 may be subject to postponement as though under clause 8 of rule 20. | House floor actions |
| 2016-09-08 | Floor | Rule H. Res. 844 passed House. | House floor actions |
| 2016-09-06 | Floor | Rules Committee Resolution H. Res. 844 Reported to House. Rule provides for consideration of H.R. 2357 and H.R. 5424. | House floor actions |
| 2016-07-21 | Calendars | Placed on the Union Calendar, Calendar No. 540. | House floor actions |
| 2016-07-21 | Committee | Reported (Amended) by the Committee on Financial Services. H. Rept. 114-698. | House floor actions |
| 2016-06-16 | Committee | Ordered to be Reported (Amended) by the Yeas and Nays: 47 - 12. | House committee actions |
| 2016-06-16 | Committee | Committee Consideration and Mark-up Session Held. | House committee actions |
| 2016-06-15 | Committee | Committee Consideration and Mark-up Session Held. | House committee actions |
| 2016-06-09 | IntroReferral | Referred to the House Committee on Financial Services. | House floor actions |
| 2016-06-09 | IntroReferral | Introduced in House | Library of Congress |
| 2016-05-17 | Committee | Hearings Held by the Subcommittee on Capital Markets and Government Sponsored Enterprises Prior to Introduction and Referral. | House committee actions |