110 STAT. 3436 PUBLIC LAW 104-290—OCT. 11, 1996 15 USC 80a-3 note. 15 USC 80a-3 note. 15 USC 80a-2 note. (3) EMPLOYEE EXCEPTION.— Not later than 1 year after the date of enactment of this Act, the Commission shall prescribe rules pursuant to its authority under section 6 of the Investment Company Act of 1940 to permit the ownership of securities by knowledgeable employees of the issuer of the securities or an affiliated person without loss of the exception of the issuer under paragraph (1) or (7) of section 3(c) of that Act from treatment as an investment company under that Act. (4) BENEFICIAL OWNERSHIP. —Not later than 180 days after the date of enactment of this Act, the Commission shall prescribe rules defining the term "beneficial owner" for purposes of section 3(c)(7)(B) of the Investment Company Act of 1940, as amended by this Act. (e) EFFECTIVE DATE. —The amendments made by this section shall take effect on the earlier of—- (1) 180 days after the date of enactment of this Act; or (2) the date on which the rulemeiking required under subsection (d)(2) is completed. SEC. 210. PERFORMANCE FEES EXEMPTIONS. Section 205 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended— (1) in subsection (b)— (A) in paragraph (2), by striking "or" at the end; (B) in paragraph (3), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following new paragraphs: "(4) apply to an investment advisory contract with a company excepted from the definition of an investment company under section 3(c)(7) of title I of this Act; or "(5) apply to an investment advisory contract with a person who is not a resident of the United States."; and (2) by adding at the end the following new subsection: "(e) The Commission, by rule or regulation, upon its own motion, or by order upon application, may conditionally or unconditionally exempt any person or transaction, or any class or classes of persons or transactions, from subsection (a)(1), if and to the extent that the exemption relates to an investment advisory contract with any person that the Commission determines does not need the protections of subsection (a)(1), on the basis of such factors as financial sophistication, net worth, knowledge of and experience in financial matters, amount of assets under management, relationship with a registered investment adviser, and such other factors as the Commission determines are consistent with this section.". Investment Advisers Supervision Coordination Act. 15 USC 80b-20 note. TITLE III^INVESTMENT ADVISERS SUPERVISION COORDINATION ACT SEC. 301. SHORT TITLE. This title may be cited as the "Investment Advisers Supervision Coordination Act".
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