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      "text": "Trusts formed by key employees for the benefit of other non-spousal family members of that employee",
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      "text": "Certain key employees who do not meet the 12-month experience requirement, and other long-term employees of the family who do not meet the \"knowledgeable employee standard\"",
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      "text": "Charitable or not-for-profit organizations that have accepted any funding from non-family clients, including the general public, unless restructured appropriately by 31 December 2013",
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      "text": "Irrevocable trusts who provide for a current beneficiary that is not a family client, as well as trusts where a contingent beneficiary that is not a family client becomes a current beneficiary, unless the involuntary transfer rules are followed",
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      "text": "Spouses or other immediate family members of key employees, except with respect to spousal joint property with the key employee",
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      "text": "Key employees of family entities who are not also employees of the family office, such as employees of related family-owned operating companies",
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      "text": "It is important to note that the SEC specifically excludes certain other parties from the definition of family clients. Providing services under the Advisers Act to these individuals would violate the exclusion. These exclusions include:",
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      "text": "Any other employee of the family office who, in connection with his or her regular functions or duties, participates in investment activities, provided such an employee has been performing such services or substantially similar functions for at least 12 months in a family office setting, unless the employee performs solely clerical, secretarial or administrative functions",
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      "text": "The SEC decided against rescinding previously issued exempt orders, such that family offices in receipt of existing exempt orders would continue to be exempt even if they did not meet the terms of the exclusion.",
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      "text": "As regards ownership and control of the family office, Rule 202 makes clear that in order to qualify for the exclusion, ownership must reside wholly in the hands of family clients, but control must remain either directly or indirectly in the hands of family members and family entities.",
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      "text": "52 EY Family Office Guide Pathway to successful family and wealth management",
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      "text": "The SEC confirmed their position that family members retaining the right to appoint, terminate, or replace the directors does not cure this issue if the board is controlled by nonfamily members.",
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      "text": "Rule 202 and the exclusion have provided greater clarity on the registration requirements for family offices. But uncertainty still exists in certain key areas, especially when the family office is a division of an operating business entity rather than a separate legal entity.",
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      "text": "In their commentary on Rule 202, the SEC specifically prohibits key employees, their trusts and their personally controlled entities from making additional investments through the family office after their employment ends.",
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      "text": "These distinctions concerning which specific employees may receive investment services are very complicated and may prompt the family office to implement detailed policies preventing unintended consequences.",
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