Family Office Insights: Update on SEC's Family Office Rule

November 2022
Region: Americas

As we have discussed in a prior Family Office Insight, the so-called “Family Office Rule” under the Investment Advisers Act of 1940 provides an exemption from registration under the Advisers Act for family offices that (1) provide investment advice only to “family clients”; (2) are wholly owned by family clients and exclusively controlled by family members/family entities; and (3) do not hold themselves out to the public as investment advisers.

Since the release of this Rule, the Securities and Exchange Commission has provided some further guidance on the scope of the complex “family client” definition and has granted a limited number of exceptions to the Family Office Rule to allow for a spouse’s relatives or other closely related family members to be included in the definition of “family client.” This recent Family Office Insights provides additional information on these exceptions.