On Wednesday, June 22, 2011, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules regarding regulatory jurisdiction for mid-sized investment advisers. Under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a registered investment adviser with between $25 and $100 million of assets under management will be required to “switch” from SEC to state registration with one or more state securities regulators (assuming it is relying upon the AUM as the basis for SEC registration). According to a press release regarding today’s meeting, during the first quarter of 2012, SEC registered investment advisers will be required to declare that they are eligible to remain registered with the SEC. Investment advisers who will no longer remain eligible for SEC registration will have until June 28, 2012 to complete the switch to state registration. The SEC staff estimated 3,200 investment advisers are anticipated to be required to “switch” to from SEC to state regulation.
Investment advisers with between $25 and $100 million in assets under management, which are located in a state where the investment adviser would not be subject to examination by a state securities regulator, will not be subject to this switch. The SEC staff indicated that it is currently aware of the following three states that will not perform examinations: Minnesota; New York; and Wyoming.
RIA Compliance Consultants (RCC) will be able to assist you through this transition. Although we are still awaiting the final rule release for all details regarding the switch, we strongly recommend that you begin preparing yourself now. Waiting until the last minute to begin the state registration process may result in you not meeting the appropriate regulatory deadlines. If you would like to engaging RCC to assist you with this process, contact your RCC consultant or click here to schedule a time for one of our consultant’s to call you.
Posted by Bryan Hill