News & Analysis as of

Qualified Client Investment Advisers Act of 1940

Winstead PC

SEC Increases Financial Thresholds for Qualified Clients

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On August 16, 2021, the financial thresholds specified in the definition of “qualified client” under Rule 205‑3 of the Investment Advisers Act of 1940 (“Advisers Act”) will increase (i) from $1 million to $1.1 million (assets...more

Foley Hoag LLP

Reminder: Increased “Qualified Client” Dollar Amount Tests to Take Effect August 16, 2021

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Effective August 16, 2021, the increased dollar amount thresholds for “qualified clients” as defined under Rule 205-3 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) will go into effect. ...more

Pillsbury Winthrop Shaw Pittman LLP

Dollar Threshold Change for “Qualified Client” Definition under the Investment Advisers Act

Most 3(c)(1) private equity and hedge funds are impacted; exempt venture capital funds are not impacted. Effective August 16, 2021, the dollar thresholds specified in the definition of “qualified client” under Rule 205-3...more

Stinson LLP

SEC Increases Qualified Client Threshold

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In an order effective August 16, 2021, the Securities and Exchange Commission (SEC) increased the dollar amount tests in the "qualified client" definition under Advisers Act Rule 205-3....more

Kramer Levin Naftalis & Frankel LLP

SEC Increases Slightly ‘Qualified Client’ Dollar Amount Thresholds

On June 17, 2021, the Securities and Exchange Commission (SEC) issued an order (the “Order”) approving a revision to Rule 205-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), which exempts...more

Robinson & Cole LLP

SEC Registered Investment Advisers—A Review of 2016 and a Look at What’s Ahead for 2017

Robinson & Cole LLP on

As we near the seventh anniversary of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), private equity and hedge fund advisers are subject to an ever-increasing degree of supervision...more

Neal, Gerber & Eisenberg LLP

SEC Increases Performance Fee Net Worth Threshold for Qualified Clients

Effective August 15, 2016, the net worth threshold for qualified clients under Rule 205-3 is increased from $2 million to $2.1 million. If you have advisory agreements or subscription agreements that require a client or...more

Winstead PC

Recent Amendment of SEC’S “Qualified Client” Definition

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The SEC recently adopted an amendment increasing the net worth threshold set forth in the definition of "qualified client" under the Advisers Act. For an investment adviser that is registered with the SEC, or one that is...more

Dechert LLP

2016/07/12 SEC Adopts Inflation-Based Adjustment to “Qualified Client” Thresholds

Dechert LLP on

The U.S. Securities and Exchange Commission issued a final order (Order) on June 14, 2016, to adjust for inflation the “qualified client” thresholds applicable when a registered investment adviser charges a performance fee in...more

Foley Hoag LLP

SEC Increases Performance Fee Thresholds

Foley Hoag LLP on

As noted in a previous alert, the Securities and Exchange Commission has now issued an Order, effective as of August 15, 2016 (the "Effective Date"), which amends SEC Rule 205-3 (the “Performance Fee Rule”) under the...more

Faegre Drinker Biddle & Reath LLP

SEC Raises ‘Qualified Client' Net Worth Threshold from $2 Million to $2.1 Million

Rule 205-3 under the Investment Advisers Act of 1940 permits investment advisers to charge performance- based compensation (including performance and incentive fees by private funds) only to “qualified clients.” On June 14,...more

Akin Gump Strauss Hauer & Feld LLP

SEC Orders Increase in Qualified Client Threshold

The Securities and Exchange Commission (SEC) issued a final order on June 14 to adjust for inflation the net-worth threshold for a registered investment adviser to charge performance-based compensation to its advisory clients...more

BCLP

SEC to Adjust Net Worth Threshold for Qualified Clients

BCLP on

On June 14, 2016, the U.S. Securities and Exchange Commission (“SEC”) issued an order increasing the net worth threshold for “qualified clients” under the Investment Advisers Act of 1940 (“Advisers Act”). This change, made...more

Goodwin

Financial Services Weekly News - June 2016 #4

Goodwin on

Regulatory Developments - SEC Issues Order Approving Inflation Adjustments to “Qualified Client” Dollar Thresholds for Investment Adviser Performance Fee Rule - On June 14, the SEC issued an order approving...more

Proskauer Rose LLP

SEC Adopts Higher Net Worth Threshold for Qualified Clients under the Advisers Act

Proskauer Rose LLP on

In an order dated June 14, 2016, the Securities and Exchange Commission (SEC) adopted its prior proposal to increase the net worth threshold for "qualified clients" under Rule 205-3 of the Investment Advisers Act of 1940 (the...more

Dorsey & Whitney LLP

SEC Raises Qualified Client Threshold for Investment Adviser Performance Fees

Dorsey & Whitney LLP on

Effective as of August 15, 2016, the dollar amount of the “qualified client” net worth test will increase from $2,000,000 to $2,100,000. On June 14, 2016, the SEC issued an Order Approving Adjustment for Inflation of the...more

Proskauer - The Capital Commitment

SEC Proposes Higher Net Worth Threshold for Qualified Clients under the Advisers Act

On Wednesday, May 18, 2016, the U.S. Securities and Exchange Commission (SEC) proposed to increase the net worth threshold for qualified clients from $2 million to $2.1 million. This proposed adjustment is being made...more

Foley Hoag LLP

SEC Clarifies Application of Qualified Client Test for Related Advisers

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Under SEC Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”), an SEC registered investment adviser is permitted to enter into an engagement that includes an incentive compensation component, provided...more

Stinson - Corporate & Securities Law Blog

SEC Provides Guidance On Definition Of “Qualified Client”

Rule 205-3 issued under the Investment Advisers Act of 1940, or the Advisers Act, provides an exemption from section 205(a)(1) of the Advisers Act, which prohibits an investment adviser from entering into an investment...more

Allen Matkins

Defining “Qualified Client” – Uff Da!

Allen Matkins on

Corporations Code Section 25234 generally prohibits an investment adviser registered in California to be compensated on the basis of a share of capital gains. This prohibition is analogous to the prohibition found in Section...more

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