S.Amdt. 4077

SA 4077. Mr. REED (for himself, Mr. Grassley, Mr. Johnson, Mr. Brown
of Ohio, and Mr. Levin) submitted an amendment intended to be proposed
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial
stability of the United States by improving accountability and
transparency in the financial system, to end ``too big to fail'', to
protect the American taxpayer by ending bailouts, to protect consumers
from abusive financial services practices, and for other purposes;
which was ordered to lie on the table; as follows:

On page 384, strike line 1 and all that follows through
page 387, line 3 and insert the following:

SEC. 407. 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 the Commission pursuant to section 202(a)(11)(G) of the
Investment Advisers Act of 1940, as added by this section,
regarding the definition 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
(2) recognizes the range of organizational, management, and
employment structures and arrangements employed by family
offices.

SEC. 408. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD
FOR FEDERAL REGISTRATION OF INVESTMENT
ADVISERS.

Section 203A(a) of the of the Investment Advisers Act of
1940 (15 U.S.C. 80b-3a(a)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(2) Treatment of mid-sized investment advisers.--
``(A) In general.--No investment adviser described in
subparagraph (B) shall register under section 203, unless the
investment adviser is an adviser to an investment company
registered under the Investment Company Act of 1940, or a
company which has elected to be a business development
company pursuant to section 54 of the Investment Company Act
of 1940, and has not withdrawn the election, except that, if
by effect of this paragraph an investment adviser would be
required to register with 15 or more States, then the adviser
may register under section 203.
``(B) Covered persons.--An investment adviser described in
this subparagraph is an investment adviser that--
``(i) is required to be registered as an investment adviser
with the securities commissioner (or any agency or office
performing like functions) of the State in which it maintains
its principal office and place of business and, if
registered, would be subject to examination as an investment
adviser by any such commissioner, agency, or office; and
``(ii) has assets under management between--

``(I) the amount specified under subparagraph (A) of
paragraph (1), as such amount may have been adjusted by the
Commission pursuant to that subparagraph; and
``(II) $100,000,000, or such higher amount as the
Commission may, by rule, deem appropriate in accordance with
the purposes of this title.''.

SEC. 409. CUSTODY OF CLIENT ASSETS.

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