Advisers Act Cash Solicitation Rule Not Applicable to Private Funds Under New SEC Letter

On July 28, 2008, the SEC staff issued an industry-favorable no-action letter stating that Rule 206(4)-3 under the Investment Advisers Act of 1940, as amended, commonly known as the “Cash Solicitation Rule,” does not apply when an SEC registered investment adviser pays a person to solicit prospective investors for a private fund.