October 22, 2012

SEC Issues Notice of Intent to Cancel Registrations of 293 Investment Advisers

SEC Issues Notice of Intent to Cancel Registrations of 293 Investment Advisers

Summary of SEC Release No. IA-3490; October 19, 2012

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was signed into law requiring mid-sized advisers (those between $25 million and $90 million) to move from SEC to state registration by June 28, 2012. As of the date of this report, more than 2,300 mid-sized advisers – those managing less than $100 million of assets – have made the transition to state regulation, but there are 293 that have yet to transition.

On October 19, 2012, the SEC issued Release No. IA-3490 identifying 293 advisers who may no longer be eligible for registration with the SEC because they manage less than $90 million or have failed to comply with other requirements.

Advisers identified in the notice have until December 17, 2012 to withdraw their SEC registration by filing a partial Form ADV-W, or inform the Commission staff that they have should remain eligible for registration with the SEC. After that date, the Commission may issue an order cancelling the registration of advisers who have not filed an amendment, withdrawn from registration, or requested a hearing.

Advisors receiving such a letter should work with their compliance consultants and their state regulators to promptly resolve any open registrations. If you have a registration in process with the state(s), we do suggest contacting the SEC in writing to demonstrate that the Advisor is making a good faith effort to comply.

If you have any questions regarding this compliance alert, please contact us at Support@AdvisorAssist.com or call 617-800-0388.



If an Advisor is on the SEC list, they of course need to take immediate action. The SEC expects that an advisor that is on the list will make a prompt update to the ADV to either validate qualification or confirm they are no longer eligible.

While the firm remains on this list, they must amend ADV1 and ADV2A to disclose the potential event that the firm may be subject to an order by the SEC to cancel the SEC registration of the adviser pursuant to Section 203(h) of the Investment Advisers Act of 1940.

Item 11 of ADV1 must be answered Yes for the duration of the period where there is the potential for the firm to be issued such an Order from the SEC.

Item 11.G. Are you or any advisory affiliate now the subject of any regulatory proceeding that could result in a "yes" answer to any part of Item 11.C., 11.D., or 11.E.? THIS MUST BE answered yes and Schedule D must be completed.

As this is a confusing sequencing, we strongly suggesting seeking guidance before taking action.

Post a Comment