Finding A Way.

The Numbers Are In: Fewer Advisory Firms Switch to State Oversight

NYC hedge fund lawyerFewer advisory firms than expected will be converting to state registration. As of April 5, just over 1,900 firms that are currently registered with the Securities and Exchange Commission (SEC) had indicated that they were no longer eligible for SEC registration, according to the SEC.

As we discussed in previous posts, advisors with assets under management (AUM) of between $25 million and $100 million must register with state securities regulators by June 28 under new rules.  SEC-registered advisers with at least $90 million AUM can remain with the SEC.  Advisors that were not required to switch had to notify the SEC of their continued eligibility by March 30.

The April numbers are significantly lower that what the SEC had initially predicted, which had expected 3,200 firms to make the switch. Some advisors may have worked hard to make the numbers, and for some, luck, in the form of really good markets, was on their side.  My sense is that generally advisors like to be regulated by the SEC—it may offer a sense of certainty and simplicity. What’s not to like!

Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.

If your company would like to strengthen its business practices, please contact us today so we can leverage our experience to create real-life business and legal solutions to help your business thrive.