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shall issue final rules to define the term ‘venture capital fund’ for purposes of this subsection. The Commission shall require such Records. advisers to maintain such records and provide to the Commission such annual or other reports as the Commission determines nec- essary or appropriate in the public interest or for the protection of investors.’’.

SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
ADVISERS.
Section 203 of the Investment Advisers Act of 1940 (15 U.S.C.
80b–3) is amended by adding at the end the following:
‘‘(m) EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
ADVISERS.—
‘‘(1) IN GENERAL.—The Commission shall provide an exemp-
tion from the registration requirements under this section to
any investment adviser of private funds, if each of such invest-
ment adviser acts solely as an adviser to private funds and
has assets under management in the United States of less
than $150,000,000.
‘‘(2) REPORTING.—The Commission shall require investment Records.
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 appro-
priate in the public interest or for the protection of investors.
‘‘(n) REGISTRATION AND EXAMINATION OF MID-SIZED PRIVATE
FUND ADVISERS.—In prescribing regulations to carry out the Regulations.
requirements of this section with respect to investment advisers Procedures.
acting as investment advisers to mid-sized private funds, the
Commission shall take into account the size, governance, and invest-
ment strategy of such funds to determine whether they pose sys-
temic risk, and shall provide for registration and examination proce-
dures with respect to the investment advisers of such funds which
reflect the level of systemic risk posed by such funds.’’.

SEC. 409. FAMILY OFFICES.
(a) IN GENERAL.—Section 202(a)(11) of the Investment Advisers
Act of 1940 (15 U.S.C. 80b–2(a)(11)) is amended by striking ‘‘or
(G)’’ and inserting the following: ‘‘; (G) any family office, as defined
by rule, regulation, or order of the Commission, in accordance
with the purposes of this title; or (H)’’.
(b) RULEMAKING.—The rules, regulations, or orders issued by 15 USC 80b–2
the Commission pursuant to section 202(a)(11)(G) of the Investment note.
Advisers Act of 1940, as added by this section, regarding the defini-
tion of the term ‘‘family office’’ shall provide for an exemption
that—
(1) is consistent with the previous exemptive policy of the
Commission, as reflected in exemptive orders for family offices
in effect on the date of enactment of this Act, and the
grandfathering provisions in paragraph (3);
(2) recognizes the range of organizational, management,
and employment structures and arrangements employed by
family offices; and
(3) does not exclude any person who was not registered
or required to be registered under the Investment Advisers
Act of 1940 on January 1, 2010 from the definition of the

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