SEC Raises Advisers Act “Qualified Client” Dollar-Based Thresholds

Effective June 29, 2026, the SEC is increasing the dollar-based thresholds that define a “qualified client” in Rule 205-3(d) (Rule) under the Investment Advisers Act of 1940 (Advisers Act).¹ The SEC is required to adjust these thresholds for inflation approximately every five years. The thresholds are adjusted using the Personal Consumption Expenditures Chain-Type Price Index (PCE Index), published by the U.S. Department of Commerce, rounded to the nearest $100,000.

The Advisers Act prohibits SEC-registered investment advisers (RIAs) from entering into, extending, renewing, or performing any investment advisory contract that provides for compensation on the basis of a share of the capital gains upon, or the capital appreciation of, client funds (i.e., carry and other performance-based fees).²