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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Notices
Applicants Legal Analysis 1. Section 202a11 of the Advisers Act defines the term investment adviser to mean any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. . . .
2. The Applicant falls within the definition of an investment adviser under Section 202a11. The Family Office Rule provides an exclusion from the definition of investment adviser for which the Applicant is currently eligible but would no longer qualify if the Applicant provides Services to the Additional Family Clients. Absent the requested relief, once the Applicant provides Services to the Additional Family Client and can no longer rely on the Family Office Rule, the Applicant would be required to register as an investment adviser in the State of Nevada and would be subject to regulation in the State of Nevada, notwithstanding that i the Applicant does not hold itself out to the public as an investment adviser and does not market non-public offerings to persons or entities that are not Family Clients, ii the Applicant is wholly owned and controlled by members of the Lewis Family, in accordance with paragraph b2 of the Family Office Rule, and iii the Applicant is a family office for the Lewis Family and will not offer its Services to anyone other than Family Clients and the Additional Family Client.
3. The Applicant submits that its proposed relationship with the Additional Family Client does not change the nature of the office into that of a commercial advisory firm. In support of this argument, the Applicant notes that if the Common Ancestor chosen were one branch higher in the familial tree, the Niece would be a Family Member. The Applicant states that in requesting the order, the Applicant is not attempting to expand its operations or engage in any level of commercial activity to which the Advisers Act is designed to apply.
Indeed, although the Additional Family Client does not fall within the definition of Family Member, the Applicant represents that the Additional Family Client has been treated as a close family member of the Lewis Family for many years. Additionally, the Applicant represents that if the Additional Family Clients assets were managed by the
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Applicant, the assets owned by the Additional Family Client would represent less than half of one percent .5% of the Applicants assets under management.
4. The Applicant also submits that there is no public interest in requiring the Applicant to be registered under the Advisers Act. The Applicant states that the office is a private organization that was formed to be the family trust company for the Lewis Family, and that the Applicant does not have any public clients. The Applicant maintains that the offices Advisory Services are exclusively tailored to the needs of the Lewis Family and the Additional Family Client. The Applicant argues that the provision of Advisory Services to the Additional Family Client does not create any public interest that would require the office to be registered under the Advisers Act that is different in any manner than the considerations that apply to a family office that complies in all respects with the Family Office Rule.
5. The Applicant argues that, although the Family Office Rule largely codified the exemptive orders that the Commission had previously issued before the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Commission recognized in proposing the rule that the exact representations, conditions, or terms contained in every exemptive order could not be captured in a rule of general applicability. The Commission noted that family offices would remain free to seek a Commission exemptive order to advise an individual or entity that did not meet the proposed family client definition, and that certain issues would be more appropriately addressed through an exemptive order process where the Commission can consider the specific facts and circumstances, than through a rule of general applicability.
6. The Applicant maintains that, based on its unusual circumstances desiring to provide Services to one Additional Family Client who has been considered and treated as a family member and whose status as a client of the office would not change the nature of the offices operations to that of a commercial advisory businessan exemptive order is appropriate based on the Applicants specific facts and circumstances.
7. For the foregoing reasons, the Applicant requests an order declaring it to be a person not within the intent of Section 202a11 of the Advisers Act.
The Applicant submits that the order is necessary and appropriate, in the public interest, consistent with the protection of investors, and consistent with the
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purposes fairly intended by the policy and provisions of the Advisers Act.
Applicants Conditions 1. The Applicant will offer and provide Advisory Services only to Family Clients and to the Additional Family Client, who generally will be deemed to be, and be treated as if she were, a Family Client; provided, however, that the Additional Family Client will be deemed to be, and treated as if she were, a Family Member for purposes of paragraph b1 and for purposes of paragraph d4vi of the Family Office Rule.
2. The Applicant will at all times be wholly-owned by Family Clients and exclusively controlled directly or indirectly by one or more Family Members or Family Entities excluding the Additional Family Clients Family Entities as defined in paragraph d5
of the Family Office Rule.
3. At all times the assets beneficially owned by Family Members and/or Family Entities excluding the Additional Family Clients Family Entities will account for at least 99% of the assets for which the Applicant provides Advisory Services.
4. The Applicant will comply with all the terms for exclusion from the definition of investment adviser under the Advisers Act set forth in the Family Office Rule except for the limited exception requested by this application.
For the Commission, by the Division of Investment Management, under delegated authority.
J. Matthew DeLesDernier, Assistant Secretary.
FR Doc. 202104215 Filed 3121; 8:45 am BILLING CODE 801101P

DEPARTMENT OF THE TREASURY
Internal Revenue Service Proposed Collection; Comment Request for Affordable Care Act Internal Claims and Appeals and External Review Disclosures Internal Revenue Service IRS, Treasury.
ACTION: Notice and request for comments.
AGENCY:

The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on continuing information collections, as required by the Paperwork Reduction Act of 1995.
The IRS is soliciting comments
SUMMARY:

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