As you may remember from our earlier blogs on registered investment advisers (RIAs), whether a firm should be registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC) or with a state is typically determined by the amount of regulatory assets the firm has that receive continuous and regular supervision or management (collectively known as a firm’s “regulatory assets under management” or “regulatory AUM”); with some exceptions, firms that have over $100 million of regulatory AUM must register with the SEC, while smaller advisers must register with state securities authorities instead. But, what if a new investment adviser doesn’t currently have over $100 million of regulatory AUM, but expects to soon? Is the firm required to wait until it has over $100 million of regulatory AUM to register with the SEC?
The Securities and Exchange Commission (SEC) recently announced revisions to the ADV Part 1. These changes will affect most Registered Investment Advisers (RIAs) when they complete their annual amendment; however, RIAs may be prompted to address additional questions if a firm submits an amendment on or after October 1st.