ARTICLE
19 September 2011

Reminder: Increased "Qualified Client" Dollar Amount Tests To Take Effect On September 19

FH
Foley Hoag LLP

Contributor

Foley Hoag provides innovative, strategic legal services to public, private and government clients. We have premier capabilities in the life sciences, healthcare, technology, energy, professional services and private funds fields, and in cross-border disputes. The diverse experiences of our lawyers contribute to the exceptional senior-level service we deliver to clients.
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.
United States Finance and Banking

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.

Certain states including Massachusetts also follow the SEC's performance fee eligibility test with respect to advisers located in the state, so advisers not registered with the SEC may be subject to these new tests as well.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More