The Investment Advisers Act of 1940 (Advisers Act) governs the activities of "anyone who engages in the business of advising others whether to invest in, purchase or sell securities for compensation." While hedge fund managers are included in this definition, many managers are exempt from registration pursuant to Section 203(b)(3) of the Advisers Act. This particular Section exempts from registration an adviser with fewer than 15 clients during the prior 12 months who does not hold himself out to the public as an investment adviser and does not act as an investment adviser to a registered investment company. Even if exempt from registration, an investment adviser is subject to the anti-fraud provisions of the Advisers Act.


source: CME