In the United States, Registered Investment Advisors (RIAs) must register with either the federal government (SEC) or with one or more state securities regulatory agencies. The requirement for SEC registration depends on specific criteria.
Key Facts
- Asset Threshold: If an RIA manages $100 million or more in client assets, they are required to register with the SEC. This allows them to operate at the federal level instead of registering with state securities authorities.
- Internet-Only Advisors: Regardless of the amount of assets under management, if an RIA operates as an internet-only advisor, they must register with the SEC.
- Multi-State Operations: If an RIA operates in 15 or more states, they must register with the SEC, regardless of the amount of assets under management.
- New York City Headquarters: If an RIA has a principal place of business or headquarters in New York City and has assets under management of $25 million or higher, they must register with the SEC.
- Advisors to Investment Companies: If an RIA advises investment companies, as defined by the Investment Company Act of 1940, they must register with the SEC, regardless of the amount of assets under management.
Asset Threshold
RIAs with regulatory assets under management (AUM) of $100 million or more are required to register with the SEC. This threshold allows them to operate at the federal level, exempting them from state registration requirements.
Internet-Only Advisors
Regardless of AUM, RIAs that operate exclusively as internet-only advisors must register with the SEC. This requirement ensures compliance with federal regulations for online financial advice.
Multi-State Operations
RIAs that operate in 15 or more states are required to register with the SEC. This provision simplifies compliance for RIAs with a significant multi-state presence.
New York City Headquarters
RIAs with a principal place of business or headquarters in New York City and AUM of $25 million or higher must register with the SEC. This requirement aligns with the specific regulatory landscape of New York City.
Advisors to Investment Companies
RIAs that advise investment companies, as defined by the Investment Company Act of 1940, must register with the SEC. This requirement ensures compliance with federal regulations governing investment companies.
Citations
- Becoming a Registered Investment Advisor
- How To Register Your RIA Firm: SEC Vs State Registration
- Guide to SEC Investment Adviser Registration
FAQs
What is the asset threshold for SEC registration?
RIAs with regulatory assets under management (AUM) of $100 million or more are required to register with the SEC.
Do internet-only RIAs need to register with the SEC?
Yes, regardless of AUM, RIAs that operate exclusively as internet-only advisors must register with the SEC.
When are RIAs with multi-state operations required to register with the SEC?
RIAs that operate in 15 or more states are required to register with the SEC.
Is SEC registration required for RIAs headquartered in New York City?
Yes, RIAs with a principal place of business or headquarters in New York City and AUM of $25 million or higher must register with the SEC.
Do RIAs that advise investment companies need to register with the SEC?
Yes, RIAs that advise investment companies, as defined by the Investment Company Act of 1940, must register with the SEC.
What is the purpose of SEC registration for RIAs?
SEC registration allows RIAs to operate at the federal level, simplifying compliance for those with a significant multi-state presence or specific operational characteristics.
Are there any exemptions to SEC registration for RIAs?
Yes, there are several exemptions, including the pension consultant exemption, related-adviser exemption, 120-day exemption, multi-state adviser exemption, and internet adviser exemption.
What are the benefits of SEC registration for RIAs?
SEC registration provides RIAs with access to a wider pool of potential clients, enhances their credibility, and simplifies compliance for those operating in multiple states.