Approaching Deadlines for Mid-Sized Investment Advisors

March 20, 2012

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act passed on July 21, 2010, the U.S. Securities and Exchange Commission (“SEC”) is required to issue rules generally requiring “mid-sized investment advisors”, which is an investment advisor with between $25 million and $100 million of regulatory assets under management, to switch from the SEC to state registration.   The intent of the new rule is to reallocate primary regulatory oversight of mid-sized investment advisors to the state securities regulators. The SEC’s new rule became effective July 21, 2011.

  • All SEC registered investment advisors have until March 30, 2012, regardless of their firm’s fiscal year end, to file an amendment to their Form ADV Part 1 to report their reason for eligibility to remain SEC registered or to report that they are no longer eligible for SEC registration.
  • Both SEC and state registered investment advisors with a December fiscal year end must file their ADV annual amendments by March 30, 2012.  SEC registered investment advisors will report their eligibility for SEC registration on the annual amendment. Investment advisors need to be aware that regulators have made several revisions to the Form ADV Part 1 and should take the necessary time to closely review and fully understand the revised and new items.
  • All SEC registered investment advisors that report they are no longer eligible for SEC registration have until June 28, 2012, to file an ADV-W to withdraw their SEC registration. All SEC registered investment advisors that must withdraw their SEC registration and “switch” to the appropriate state securities registration will need to be approved by the appropriate state regulators no later than June 28, 2012.

RIA Compliance Consultants can help you with updating your compliance program to comply with the new regulatory requirements or can assist you with switching from SEC to state registration.  If you are an existing client of RIA Compliance Consultants interested in discussing how we can assist your investment advisor, please contact your consultant. If you are a new client that would like to speak with us regarding the services we can provide, please click here to schedule a time to speak with one of our consultants.

Posted by Bryan Hill
Labels: SEC, Switch from SEC to State