Switch Of Mid-Size RIAs To State Supervision Is Official

Thursday, June 23, 2011 23:09
Switch Of Mid-Size RIAs To State Supervision Is Official

Tags: sec

Despite some speculation earlier this year that the SEC would delay implementing the Dodd-Frank changes to the Investment Advisers Act of 1940, the new rules are now on the books and the enforcement clock is ticking.

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In an open meeting explaining the new rules, the SEC focused on how it is shifting its treatment of advisors to hedge funds and other "private" investment vehicles. (Video)


But more significant for A4A readers was confirmation that the transfer of oversight over most RIA firms with under $100 million in AUM to the states is on schedule.


Advisors who manage more than $100 million will have to declare that fact to the SEC in the first quarter of 2012 in order to maintain national registration, while those who are moving toward state regulation have until June 28, 2012 to make the change.


Furthermore, new RIA firms created after July 21 will immediately be subject to the new $100 million threshold for determining state or SEC supervision.


Allowing these firms to start under the old system and then move to the new rules would be "burdensome," the SEC says.


Finally, New York, Minnesota, and Wyoming have opted out of taking over those RIAs who run between $25 million and $100 million. That pushed 350 firms back into the SEC's ambit after all.



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