Investment advisers that are not registered with the SEC in reliance on Section 203(b)(3) of the Investment Advisers Act of 1940 (the “Federal Private Adviser Exemption”) and that are also not registered with any state in reliance on state investment adviser registration exemptions or exclusions that are based upon the Federal Private Adviser Exemption (“State Private Adviser Exemption”) should reexamine their state registration status in light of the elimination of the Federal Private Adviser Exemption as of July 21, 2011. The Federal Private Adviser Exemption provides an exemption from registration for an investment adviser who during the preceding 12 months has had fewer than 15 clients and who does not hold itself out generally to the public as an investment adviser.

The following states have a State Private Adviser Exemption that, absent further state legislative or regulatory action, will be eliminated as of July 21, 2011:

• California,
• Colorado,
• Connecticut,
• Missouri,
• New York,
• North Carolina,
• South Dakota, and
• Virginia.

California has acted to extend reliance on its State Private Adviser Exemption until January 21, 2012. None of the other states listed above has taken similar action.*

If your firm is currently relying on the Federal Private Adviser Exemption and has clients in any of the above states (except California) please contact your primary attorney in the Investment Management Group as soon as possible to discuss whether state investment adviser registration may be required or whether another exemption is available. Please note that it may take considerable time to prepare a Form ADV and to receive state approval if state registration is required.

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* Please note that an exemption from state investment adviser registration will continue to be available in Connecticut for an investment adviser with no place of business in Connecticut who, during the preceding 12 months, has had no more than five clients who are residents of Connecticut (no institutions are excluded from the five client count). The Connecticut legislature has enacted an amendment to its statutes which, when signed by the governor, will permit the Commissioner of Banking, on or after July 21, 2011, to delay elimination of its State Private Adviser Exemption.

The investment adviser registration requirements in New York will continue to exempt from registration a person who sold, during the preceding 12 month period, investment advisory services to fewer than six persons residing in New York (excluding certain institutions).

In the remaining states listed above (Colorado, Missouri, North Carolina, South Dakota and Virginia), an exemption from state investment adviser registration will continue to be available for an investment adviser with no place of business in the state, who during the preceding 12 months, has had no more than five clients who are residents of such state (excluding certain institutions).

Please note further that in New Jersey, an exemption from state investment adviser registration will also continue to be available for an investment adviser (with or without a place of business in New Jersey) who, during any period of 12 consecutive months, does not have more than five clients who are residents of New Jersey (excluding certain institutions).