Cheat sheet for recent SEC regulatory changes and amendments

Thanks for the great summary, very concise and helpful!

Yesterday, we had an exchange that passed through the RIABiz office on a finer point relating to this cheat sheet article. I have published the initial question from Ryan Barden, and the final answer from MarketCounsel’s Scott Brown. I thought other people might find it helpful.

Here it is:

Hi Brooke,

Perhaps you can clarify something for me regarding these two statements:

Under the new rules, advisors currently registered with the SEC will have until March 30, 2012 to certify that they are qualified for SEC registration – e.g., that they have registered assets under management of at least $100 million. Advisors that fall short of the new threshold (the old threshold was $25 million) are required to register with the appropriate state authorities and withdraw from SEC registration by June 28, 2012.

and

Once registered, however, the RIA need not withdraw its registration until the firm’s regulatory assets under management fall below $90 million as of the time of the firm’s annual updating amendment.

So if I am currently registered with the SEC and have $91 million under management as of March 31, 2012, do I have to switch or not?

Thanks,

Ryan Barden
Barden Capital Management, Inc.

Brooke,

I spoke with the SEC. They acknowledged their Release was a little unclear, but appreciated us following up. In short, the $90M threshold will be in effect for March 30, 2012. Thus, if Ryan’s firm has $91M as of March 30, 2012, they can remain registered with the SEC. I hope this is helpful.

Regards,
Scott M. Brown

For those of your readers who will be transitioning from SEC to their home state sometime in the future (4th qtr of 2011, 1st of 2012), now is the time to read the home state regs to understand them (identify consistency or inconsistency with SEC regs). Also, to discuss internally whether to keep the “CCO and Compliiance Program” you’ve created as a SEC registered adviser, as the states have no equivalent requirement. This includes net capital requirements (among som many ohter issues), including revising disclosures and contract language to satisfy your home state requirements (yes, its that all over again!)

The point: Use the summer (don’t waste it) to prepare for the fall and winter, the deadline is fast approaching, you have a lot of work to do!