President Trump signed into law the "RBIC Advisers Relief Act of 2018" (the "Act"). The new law amends the Investment Advisers Act to "exempt investment advisers who solely advise[] Rural Business Investment Companies (RBICs) or companies applying for an RBIC license from the requirement to register" with the SEC.
Specifically, the Act amends Investment Advisers Act Section 203(b), Section 203(l) and Section 203A(b)(1).
U.S. Senator John Kennedy (R-LA), who introduced the Act, stated that it will eliminate unnecessary compliance costs hindering the ability to create jobs and foster economic development in rural communities. The Act was cosponsored by U.S. Senator Doug Jones (D-AL).
Commentary / Dorothy Mehta
In addition to an exemption for advisers solely advising RBICs, Paragraph (3) of new IAA subsection 203(b)(8)(C) defines a "rural business investment company" as a "venture capital fund." This appears to be intended to bring advisers to RBICs and other non-RBIC venture capital funds within the definition of "exempt reporting adviser" for purposes of IAA Rule 204-4. Similarly, for the private fund adviser exemption, the assets attributed to a RBIC will be excluded for purposes of calculating the assets under management threshold for private funds (i.e., $150mm).
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