The SEC provided notice that will adjust for inflation the dollar-amount thresholds in the definition of "qualified client" under Rule 205-3 ("Exemption from the compensation prohibition of section 205(a)(1) for investment advisers") of the Advisers Act. Rule 205-3 permits an adviser to charge performance-based fees to qualified clients.
The SEC stated that the proposed order would increase (i) the minimum net worth of a "qualified client" from $2,100,000 to $2,200,000 and (ii) the minimum dollar amount of assets under management from $1,000,000 to $1,100,000.
The proposed order would go into effect 60 days following its issuance.
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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.
