Reminder: Increased “Qualified Client” Dollar Amount Tests to Take Effect on September 19


On September 19, 2011, the Securities and Exchange Commission’s (the “SEC”) increased dollar amount thresholds for “qualified clients” as defined under rule 205-3 of the Investment Advisers Act of 1940, as amended, will go into effect. Currently, an investment adviser registered with the SEC may only charge a performance fee in respect of investors who have at least $750,000 under management with the adviser, have a net worth of more than $1.5 million, or are a qualified purchaser, as defined in section 2(a)(51)(A) of the Investment Company Act of 1940. The new thresholds increase the assets under management and net worth tests to $1,000,000 and $2,000,000, respectively.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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