Are Mid-Sized Advisers Required to Register with the Securities and Exchange Commission?
Time for another typical lawyer answer … it depends! As we discussed in a previous article, a Mid-Sized Adviser is defined as an adviser that manages between $25 million and $100 million in assets under management. In addition, a Mid-Sized Adviser, just like an Investment Adviser (IA) and an Investment Adviser Representative (IAR) are required to register with the state securities division in the state where the investment adviser conducts business. However, there are occasions when an investment adviser will be required to register with the Securities and Exchange Commission (SEC).
A mid-sized adviser must register with the SEC if:
- It is not required to be registered as an adviser with the state securities authority only in the state where it maintains its principal office.
- Is not subject to examinations by the state where it maintains its principal office.
The SEC made this rule effective in July 2011. Therefore, if you are a mid-sized adviser after July 2011 and do not meet one of these two requirements, you are not permitted to register with the SEC.
Currently, there is only one state where a mid-sized adviser is not subject to examination which is New York.
The rules and compliance requirements are complex and can overlap.
For more information
If you are an investment adviser and have questions regarding registration and compliance, please contact our office at (513) 241-0400 or visit our website. We look forward to hearing from you!