November 15, 2010
Comments on File No. S7-25-10
We are counsel to family offices and generally support the proposed Rule described in Release No. IA-3098 File No. S7-25-10 (RIN 3235AK66). However, we believe that the definition of family office, as proposed, should be expanded to include companies that are wholly owned and controlled (directly or indirectly) not only by family members, but also by any trust existing for the benefit of one or more family clients. We are aware, through our participation in organizations involving family offices and discussions with other counsel representing family offices, that ownership of a family office by such a trust is a fairly common structure, and believe that the proposed Rule should be modified to specifically include this structure. As stated in note 53 to Release No. IA-3098, in 1998 the Commission granted an exemptive order to a family office owned by a trust in which half of the trustees were independent and half of the trustees were family members. See Moreland Management Company, Investment Advisers Act Release Nos. 1700 (Feb. 12, 1998) 63 FR 8710 (Feb. 20, 1998) (notice) and 1706 (Mar. 10, 1998) (order). We believe that it would be appropriate to follow the approach in this exemptive order and include within the definition of family office companies that are wholly owned and controlled by any trust existing for the benefit of one or more family clients, even if one or more of the trustees was independent. Thank you for your consideration of this matter.