By signing the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, President Obama set in motion a change for many mid-sized investment adviser firms. Under the law, approximately 3,200 mid-sized investment adviser firms with assets under management between $25 million and $100 million will switch from federal to state regulation.
Resources
- NASAA IA Switch Report, May 2013
- State Investment Adviser Registration Information
- General Guidelines for Applying as a State Registrant
- Switch Eligibility
- Registration Schedule for Switching Firms
- Calendar of Events / Switch Workshops, Seminars
- Directory of State BD/IA Registration & Examination Contacts (pdf)
- Archived Webcast, October 26, 2010
- Findings of NASAA Coordinated Review
- General FAQ
States are preparing to handle the switch.
State securities regulators are working diligently to ensure a seamless, comprehensive and effective switching process.
Making the switch is simple. Switching is not new.
Regulatory switches regularly happen when the asset levels of IA firms rise above or fall below mandated thresholds.
State registration is a smooth process for most investment advisers, especially those that have made the switch before and those that operated prior to 1996 when most investment advisers were required to register both with the SEC and with each state in which they were doing business. Most advisers should be able to make the switch without interfering with their daily business operations.
States conduct a thorough review of adviser applications.
State reviews will not change with the migration of advisers with up to $100 million in assets under management. Firms switching to state regulation for the first time can expect thorough inspections generally on a more frequent basis than they may have had experienced before. Most advisers should find that thorough inspections and strong internal compliance benefit customer and firm alike.
Investment adviser clients will benefit by knowing who is examining a firm’s documents and having an accessible regulator to contact should problems arise.
