The Unibanco Letters - Dual-Hatting Regulations and Global Enforcement
Additional Considerations
Attention should be paid to the local adviser regulation and local tax implications of Dual-Hatting personnel in a given
country
The presence of Dual-Hatting personnel in a country may raise (i) permanent establishment tax issues for the US-Registered
Investment Adviser (RIA) and (ii) questions about whether the US RIA has to be authorized in the foreign jurisdiction
✰ There may be alternatives to relying on Participating Affiliate arrangements that present less risk
。 Foreign advisers may register under the Advisers Act and serve in subadviser or co-adviser arrangements with US
affiliates
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Consideration may be given to registering as a "relying adviser" attached to the registration of the US affiliate, although
proposed regulations would then require Advisers Act compliance with respect to both US and foreign clients
。 Foreign advisers may substantively comply with Advisers Act requirements with respect to foreign clients
Morgan Lewis
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