Securities and Exchange Commission January 11, 2018 – Federal Register Recent Federal Regulation Documents

The Securities and Exchange Commission (the ``Commission'') is publishing this notice pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the ``2015 Act''). This Act requires all agencies to annually adjust for inflation the civil monetary penalties that can be imposed under the statutes administered by the agency and publish the adjusted amounts in the Federal Register. This notice sets forth the annual inflation adjustment of the maximum amount of civil monetary penalties (``CMPs'') administered by the Commission under the Securities Act of 1933, the Securities Exchange Act of 1934 (the ``Exchange Act''), the Investment Company Act of 1940, the Investment Advisers Act of 1940, and certain penalties under the Sarbanes-Oxley Act of 2002. These amounts are effective beginning on January 15, 2018, and will apply to all penalties imposed after that date for violations of the aforementioned statutes that occurred after November 2, 2015.

We are adopting amendments to the rule that defines a venture capital fund (rule 203(l)-1) and the rule that implements the private fund adviser exemption (rule 203(m)-1) under the Investment Advisers Act of 1940 (the ``Advisers Act'') in order to reflect changes made by title LXXIV, sections 74001 and 74002 of the Fixing America's Surface Transportation Act of 2015 (the ``FAST Act''), which amended sections 203(l) and 203(m) of the Advisers Act. Title LXXIV, section 74001 of the FAST Act amended the exemption from investment adviser registration for any adviser solely to one or more ``venture capital funds'' in Advisers Act section 203(l) by deeming ``small business investment companies'' to be ``venture capital funds'' for purposes of the exemption. Accordingly, we are amending the definition of a venture capital fund to include ``small business investment companies.'' Title LXXIV, section 74002 of the FAST Act amended the exemption from investment adviser registration for any adviser solely to ``private funds'' with less than $150 million in assets under management in Advisers Act section 203(m) by excluding the assets of ``small business investment companies'' when calculating ``private fund assets'' towards the registration threshold of $150 million. Accordingly, we are amending the definition of ``assets under management'' in the rule that implements the private fund adviser exemption to exclude the assets of ``small business investment companies.''