Set forth by the Dodd-Frank regulations, the threshold for which investment advisers must register with the SEC is changing from $25 million to $100 million. Advisers with AUM between $25 and $100 million (now deemed “mid-sized” advisers) must withdraw their registration with the SEC and file for registration with the relevant state regulatory agencies. This regulatory change is estimated to affect approximately 3,000 advisers, which is more that 25% of the advisers currently registered with the SEC. To help clarify what this could mean for you, here are some important upcoming dates to keep in mind:
- January 1, 2012: “Mid-sized” advisers registered with the SEC that are no longer eligible for SEC registration can begin filing amendments to their ADV indicating their ineligibility.
- March 30, 2012: Deadline to file the above mentioned amendment to the ADV.
- June 28, 2012: Deadline by which advisers must register with the relevant state agencies and withdraw their SEC registration by filing a form ADV-W.
The SEC recently added what are considered “buffer rules” in an attempt to avoid having advisers frequently switching from SEC to state registration because of a change in their AUM. As part of these buffer rules an adviser that is currently registered with the SEC does not need to switch to state registration unless their AUM falls below $90 million. Likewise, any adviser that is currently registered with the relevant state agencies does not need to switch their registration unless their AUM reaches $110 million.
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