SEC Revises Threshold Amounts For `Qualified Clients’ Under Advisers Act

The Securities and Exchange Commission Feb. 15 announced that it is adopting revisions to dollar amount thresholds under the 1940 Investment Advisers Act that determine whether advisory clients may be charged performance fees.

In addition, the SEC said it is adopting otheramendments to Advisers Act Rule 205-3 to exclude the value of an individual’s primary residence and certain other debt in calculating net worth.

Rule 205-3 allows advisers to enter into performance fee arrangements with “qualified clients.” Under the current provision, the client must have at least $750,000 under management with the adviser, or the adviser must reasonably ...