SEC identifies 'switch' laggards

Midsize advisory firms that haven't moved to state regulation have until Dec. 17

Oct 19, 2012 @ 4:06 pm

By Mark Schoeff Jr.

Nearly 300 midsize investment advisory firms that have failed to transition to state oversight from the Securities and Exchange Commission could lose their registration if they don't act by Dec. 17, the SEC announced Friday.

The agency sent a notice to 293 advisers who are lagging on the so-called “switch” mandated by the Dodd-Frank financial reform law. Under the measure, advisers with less than $100 million in assets under management are to be regulated by states rather than the SEC. About 2,300 firms have made the move.

“Working together throughout the switch, state securities regulators and the SEC have demonstrated the effectiveness and efficiency of government regulation of investment advisers,” A. Heath Abshure, Arkansas' securities commissioner and president of the North American Securities Administrators Association Inc., said in a statement issued by the SEC. “The vast majority of switching advisers have made a smooth transition to state regulation, and we are committed to working with those firms that continue to diligently pursue their state investment adviser registrations.”

As midsize advisers move to the states from the SEC, it is taking on 1,504 new advisers to hedge funds and other private funds. A total of 4,061 private advisers are now registered with the agency. The Dodd-Frank law required the private-fund registration so that the SEC could better monitor their activities for potential systemic risk to the financial system.

Overall, 11,002 investment advisers are now registered with the SEC. The agency oversees firms with a total of about $49.5 trillion in assets under management, a 13% increase since Dodd-Frank was signed into law despite a 15% decrease in the number of registered advisers.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Crossmark's Rentfrow: Why should advisors care about responsible investing?

There are lot of misconceptions when it comes to socially responsible investing. Crossmark's David Rentfrow debunks the myths and discusses opportunities for advisers.

Latest news & opinion

Nontraded REITs to post worst sales since 2002

The industry is on track to raise just $4.4 billion, well off the $19.6 billion it raised just four years ago, as new regulations hinder sales.

Broker protocol for recruiting a boon for clients

New research finds advisers whose firms have joined the agreement take better care of customers.

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

House passes tax bill, focus turns to Senate

Tax reform legislation expected to have more of a challenge in upper chamber.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print