PERFORMANCE FEES EXEMPTIONS.

SEC. 210. PERFORMANCE FEES EXEMPTIONS. Section 205 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended— (1) in subsection (b)— (A) in paragraph (2), by striking “or” at the end; (B) in paragraph (3), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following new paragraphs: “(4) apply to an investment advisory contract with a company excepted from the definition of an investment company under section 3(c)(7) of title I of this Act; or “(5) apply to an investment advisory contract with a person who is not a resident of the United States.”; and (2) by adding at the end the following new subsection: “(e) The Commission, by rule or regulation, upon its own motion, or by order upon application, may conditionally or unconditionally exempt any person or transaction, or any class or classes of persons or transactions, from subsection (a)(1), if and to the extent that the exemption relates to an investment advisory contract with any person that the Commission determines does not need the protections of subsection (a)(1), on the basis of such factors as financial sophistication, net worth, knowledge of and experience in financial matters, amount of assets under management, relationship with a registered investment adviser, and such other factors as the Commission determines are consistent with this section.”.