{"id":1024,"date":"2012-02-25T23:48:56","date_gmt":"2012-02-25T23:48:56","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2012\/02\/sec_revises_dollar_amount_thre"},"modified":"2022-03-09T16:15:23","modified_gmt":"2022-03-09T22:15:23","slug":"sec-revises-dollar-amount-thre","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-revises-dollar-amount-thre\/","title":{"rendered":"SEC Revises Dollar Amount Thresholds Determining Whether to An Advisory Client Would Have to Pay Performance Fees"},"content":{"rendered":"

\t\t\t\tThe Securities and Exchange Commission is adopting changes to the dollar amount thresholds, under the 1940 Investment Advisers Act, that are used to determine whether an advisory clients can be made to pay a performance fee. Per the current provision, an adviser has to be managing at least $750k of the client’s money or the adviser must have reasonable grounds for believing that the client’s net worth is over $1M. However, per the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act’s Section 418, the SEC has directed that inflation adjustments to the dollar amount tests would be made every five years. <\/p>\n

Last year the SEC put out an order modifying the “qualified client” assets management test from $750K to $1M. The test for net worth was changed from $1M to $2M. On February 15, 2012, the SEC said it was adopting these amendments to the Advisers Act’s Rule 205-3. <\/p>\n

Per the amended rule, an individual’s primary residence worth and specific debt related to property would not be included when determining the net worth calculation. The amended rule comes with a grandfather provision that lets advisers keep charging clients who were qualified clients prior to the rule change performance fees. The amendments will be in effect 90 days after they are published in the Federal Register.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The Securities and Exchange Commission is adopting changes to the dollar amount thresholds, under the 1940 Investment Advisers Act, that are used to determine whether an advisory clients can be made to pay a performance fee. Per the current provision, an adviser has to be managing at least $750k of the client’s money or the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3781,3801],"tags":[],"class_list":["post-1024","post","type-post","status-publish","format-standard","hentry","category-investment-advisers","category-sec"],"yoast_head":"\nSEC Revises Dollar Amount Thresholds Determining Whether to An Advisory Client Would Have to Pay Performance Fees — Investor Lawyers Blog — February 25, 2012<\/title>\n<meta name=\"description\" content=\"The Securities and Exchange Commission is adopting changes to the dollar amount thresholds, under the 1940 Investment Advisers Act, that are used to — February 25, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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