SEC Registration Compliance Considerations
Vigilant Insights
Introduction
SEC Registration is a key regulatory milestone for Investment Advisers.
Whether driven by asset growth, a new Fund launch, or changes to a Firm’s business model, understanding when SEC Registration is optional, when it is required, and what follows is critical to staying compliant.
When SEC Registration is Triggered
- State to SEC Transition
- Advisers may register with the SEC once regulatory Assets Under Management (AUM) exceed $100 million. Once AUM exceeds $110 million, SEC registration becomes mandatory.
- Timing: A State Registered Adviser that reports on its annual updating Amendment that it is eligible for SEC Registration must apply for SEC Registration within 90 days after filing that annual updating Amendment.
- ERA to SEC Registration
- Exempt Reporting Advisers (ERAs) must register with the SEC once Private Fund AUM exceeds $150 million.
- Timing: If the Adviser reports in its annual updating Amendment that it has $150 million or more in Private Fund assets, it is no longer eligible for the exemption and must register with the SEC, but the SEC provides a transition period. An Adviser that has complied with its ERA reporting obligations may apply for SEC Registration up to 90 days after filing that annual updating Amendment (and can continue operating as a Private Fund Adviser during that transition period).
- 40 Act Fund Launch
- Advisers launching a Registered Investment Company (RIC) under the Investment Company Act of 1940 are generally required to register with the SEC, regardless of AUM.
Key Compliance Considerations
SEC RIAs are subject to heightened regulatory expectations and on-going oversight. Below is a list of important Compliance Considerations for this transition to being SEC Registered.
- Chief Compliance Officer (CCO) Requirement
- SEC RIAs must designate a qualified and empowered CCO on Form ADV.
- Registration Timing
- Firms must closely monitor AUM and business changes to ensure timely registration and avoid regulatory gaps.
- SEC Examinations
- Newly Registered Advisers are typically examined within the first 12 months of bring SEC Registered, typically through a Limited-Scope Exam focused on compliance readiness.
- ERA-Specific Considerations
- Launching a 40 Act Fund eliminates ERA status and requires SEC registration.
- Taking on a Separately Managed Account (SMA) also disqualifies ERA status and triggers registration with the SEC or applicable state(s), depending on AUM.
How Vigilant Can Help
Vigilant supports Firms through SEC Registration and On-Going Compliance with practical, regulator-informed Solutions.
Vigilant provides SEC Registration Services, including the development of a customized Compliance Manual and tailored Codes of Ethics aligned with each Firm’s investment strategy and risk profile.
Once Registered with the SEC, Vigilant can also serve as the Outsourced CCO listed on Form ADV, a Service we have provided since inception for over 21 years, delivering experienced compliance leadership from day one.
For Firms with dual-hat CCOs (e.g., CEO/CCO, CFO/CCO, COO/CCO) or an in-house CCO, Vigilant offers on-going CCO Support Services. This support includes hands-on regulatory guidance, Compliance Program maintenance, SEC Exam preparedness, and real-time issue management, allowing your internal team to focus on running and growing the business while maintaining regulatory confidence.
Conclusion
SEC Registration requires careful planning, precise timing, and a Compliance Program built to meet heightened regulatory expectations.
For Firms that are required to register with the SEC, Vigilant encourages scheduling a call to discuss our SEC registration Services, confirm Registration timing to avoid missed deadlines, and explore our on-going Compliance Services to see what best fits your Firms Compliance goals and objectives.