Had an interesting conversation with a very helpful attorney at the SEC about SEC registration and assets under management . . .

As you can imagine, a lot of smaller advisers are no longer seeing the benefit of SEC registration. The perceived “prestige” factor has dissipated in the wake of the Madoff affair and in the face of an increasingly onerous regulatory burden.  A lot of client whose assets have fallen below the $30 million mark as of December 31, 2009 are trying to de-register with the SEC and register with one or more states. If their asset level is below $25 million the de-registration is mandatory. The problem is when the asset level is between $25 million and $30 million. Remember, when first registering with the SEC, an adviser is give the choice to register at $25 million but must register at $30 million. Thus, there is that grey area where the adviser has some latitude.

Is it the same for de-registration? That is, can an adviser with $28 million to report on their annual updating amendment de-register from the SEC. The answer - according to this attorney at the SEC - is no they can not de-register. It was explained that the purpose of the $25 to $30 million grey area is only meant to spare an adviser that is registered with the state from having to register with the SEC if their assets jump over $25 million.

This entry was posted on Thursday, February 18th, 2010 at 10:58 am and is filed under Registration. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.