SEC Division of Investment Management staff letter: Mayer Brown LLP

MAYER BROWN LLP
1675 BROADWAY
July 7,2008 -.
NEW YORK, NEW YORK 10019-5820
MAlN TEL (212) 506-2500
MAlN FAX (212) 262-1910 www.rnayerbrown.com
MICHAEL R. BUTOWSKY
DiRECT TEL (212) 506-251 2
DIRECTFAX (21 2) 849-551 2 mbutowsky@rnayerbrown.com Douglas J. Scheidt, Esq. Associate Director and Chief Counsel Division of Investment Management U. S. Securities and Exchange Commission 100F Street, NE Washington, DC 20549 . ... -, a. Dear Mr. Scheidt: > . , % . . . - .. We represent several clients who have asked for advice concerning the applicability of Rule 206(4)-3 (the "Cash Solicitation Rule") under the Investment Advisers Act of 1940, as amended (the "Advisers Act") to payments made to persons who refer investors solely for the purpose of investing in privately offered investment funds that are managed by an investment adviser registered under the Advisers Act. Such private investment funds rely upon a subsection under Section 3(c) of the Investment Company Act of 1940, as amended (the "1940 Act"), such as Section 3(c)(l) or Section 3(c)(7), for their exclusion from the definition of an "investment compagyyy("Private Investment Funds"). As you know, there have recently been statements made by members of the staff (the "Staff') of the U.S. Securities and Exchange Commission (the "~o~ission")' indicating that the Cash Solicitation Rule under the Advisers Act does not apply to the foregoing situation. . . z , ,. . - . . 3 " , . . . See e.g., Compliance Reporter, Plaze Says Letter On Cash Solicitations Was Misinterpreted (July 14, 2006) and comments made by SEC Staff members at the CCO Outreach Program on June 29,2006. 1