# Registration exemption

`kaal:entity:registration-exemption`

**Status.** derived

This node is assembled mechanically from the 7 claims that carry the concept tag `registration-exemption`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

7 claims across 3 works, 2013 to 2017.

**2013**

- [2337268-003](https://wulfkaal.github.io/claims/2337268-003) [condition/asserted] -- Exemption from registration under the IAA does not exempt an adviser from the antifraud provision, which reaches both negligent misstatements and misstatements made with intent to defraud.
  > Investment advisers who are exempt from registration are still subject to the IAA's antifraud provision,6 which applies to negligent misstatements and misstatements made with the intent to defraud.
  Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268
- [2337268-015](https://wulfkaal.github.io/claims/2337268-015) [failure/argued] *(failure mode)* -- The pre Dodd-Frank exemption for advisers with fewer than fifteen clients failed as a regulatory boundary because most hedge fund advisers deliberately designed their operations and legal structures to fit within it and thereby escape SEC registration and supervision.
  > Most hedge fund advisers set up their operations and legal structure to comply with the former exemption so as to avoid registration and supervision by the SEC.28
  Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268
- [2337268-016](https://wulfkaal.github.io/claims/2337268-016) [condition/asserted] -- The foreign private adviser exemption that replaced the fewer than fifteen clients exemption is conjunctive: it requires fewer than fifteen U.S. clients and investors, no U.S. place of business, no holding out to the U.S. public, and less than $25 million AUM attributable to U.S. clients and investors.
  > have fewer than fifteen clients and investors in the United States, do not have a place of business in the United States, do not hold themselves out to the U.S. public as an investment adviser, and do not attribute more than $25 million AUM solely to U.S. clients and investors.30
  Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268
- [2337268-035](https://wulfkaal.github.io/claims/2337268-035) [condition/asserted] -- The passive electronic bulletin board exemption holds only so long as the provider gives no advice on the merits of any particular trade and stays out of securities purchases and sale negotiations.
  > In order to remain exempt from registration as an investment adviser under the IAA, the provider of a "passive" electronic bulletin board cannot give advice regarding the merits of any particular trade and he or she cannot be involved in the purchase of securities or sale negotiations.
  Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268

**2016**

- [2714974-003](https://wulfkaal.github.io/claims/2714974-003) [mechanism/asserted] -- The SEC's 1985 safe harbor in Rule 203(b)(3) allowed a limited partnership itself, rather than each of its limited partners, to be counted as a single client of the general partner acting as adviser, which is what kept hedge fund advisers below the registration threshold.
  > the safe harbor provision allowed a limited partnership, rather than each of its limited partners, to be counted as a "client" of a general partner acting as investment adviser to the partnership
  Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974
- [2714974-004](https://wulfkaal.github.io/claims/2714974-004) [mechanism/asserted] -- Expanding the client counting safe harbor in 1997 to cover legal entities generally allowed investment advisers to manage large amounts of securities indirectly for several hundred investors across multiple hedge funds without registering.
  > This safe harbor allowed investment advisers to manage large amounts of securities indirectly for several hundreds of investors in several hedge funds.
  Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974

**2017**

- [2998097-001](https://wulfkaal.github.io/claims/2998097-001) [mechanism/argued] -- The Investment Advisers Act safe harbor let an adviser count an entire legal organization as one client, provided the advice followed the organization's objectives rather than those of its individual owners, which is what allowed advisers to manage money for hundreds of underlying investors while staying exempt.
  > investment advisers to private investment funds were able to count a legal organization as a single client provided the investment advice was based on the objectives of the legal organization rather than the individual investment objectives of any owners of the legal organization.
  Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/registration-exemption.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.