By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D.  of Shustak Reynolds & Partners, P.C. posted on Friday, June 6, 2025.

Robert R. Boeche II

Partner

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 122)
Direct: (619) 546-5502
Email: [email protected]

At the annual conference on federal and state securities cooperation, the Acting SEC Chairman, Mark T. Uyeda, announced the SEC may revisit the current minimum asset under management (“AUM”) threshold for investment advisers to registered with the SEC. [1] The last time the AUM threshold was increased was the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”).[2] The SEC’s goal is to sustain its focus on oversight of large investment advisers and maintain the balance between federal and state registered advisers.[3]

Background

The Dodd-Frank Act was introduced and passed by Congress as a response to the 2008 financial crisis.[4] Among several other key financial reform provisions, the Dodd-Frank Act adjusted the SEC’s jurisdiction to advisers with $100 million or more in AUM, and provided the SEC with rulemaking authority to raise the $100 million registration threshold.[5] The prior AUM threshold at $25 million was established by the National Securities Market Improvement Act of 1996.[6] Congress had re-established the AUM threshold to distinguish investment advisers with a national presence versus those with a local presence.[7]

Impacts of AUM Threshold Adjustments

When the AUM threshold was adjusted from $25 million to $100 million, the SEC saw over 3,000 investment advisers switch from being federally registered to state registered.[8] While Mr. Uyeda did not discuss what the new threshold could be, this will affect both registered advisers and exempt reporting advisers. Both registered advisers and exempt reporting advisers who fall below the anticipated new threshold would be required to withdraw their registration or exempt filing with the SEC. Advisers, respective state regulators, who currently rely on SEC registration exemptions would then be required to register with their state, if their state does not have a similar state-level registration exemption. Although Mr. Uyeda’s remarks are not a formal proposal, it does give us an indication of where the SEC is looking to further reform.

Effects on Your Firm

Should you have any questions concerning registrations, applicable exceptions, or notice filings, please contact us directly.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many investment advisors, financial professionals, broker-dealers, registered representatives, investors and businesses.
Attorney Robert R. Boeche can be reached in the firm’s San Diego office at (619) 696-9500.

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[1]  Remarks to the Annual Conference on Federal and State Securities Cooperation, https://www.sec.gov/newsroom/speeches-statements/uyeda-nasaa-040825.

[2] Id.

[3] Id.

[4] See, Wall Street Reform: The Dodd-Frank Act, https://obamawhitehouse.archives.gov/economy/middle-class/dodd-frank-wall-street-reform.

[5] Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R.4173, 111th Cong., §410, (2010), https://www.congress.gov/bill/111th-congress/house-bill/4173/text.

[6] National Securities Markets Improvement Act of 1996, Pub. L. No. 104-290, 110 Stat. 3416 (1996).

[7] See, Remarks to the Annual Conference on Federal and State Securities Cooperation.

[8] See, Securities and Exchange Commission, SEC Adopts Dodd-Frank Act Amendments to Investment Advisers Act, June 22, 2011, https://www.sec.gov/news/press/2011/2011-133.htm.

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