The SEC Amends The Internet Adviser Exemption

On March 27, 2024, the US Securities and Exchange Commission (SEC) adopted amendments to Rule 203A-2(e) of the Investment Advisers Act of 1940 (the Advisers Act) (the Internet Adviser Exemption).¹ The amended Internet Adviser Exemption will (i) require all investment advice to be provided through the internet (eliminating the de minimis exception for providing advice to a limited number of clients by other means) and (ii) replace the term "interactive website" with a new defined term, "operational interactive website," which, among other things, is intended to pick up digital platforms and other future technology in addition to traditional websites.

Background

The Internet Adviser Exemption, which was originally adopted in 2002, is one of several exemptions adopted by rule that permits investment advisers to register with the SEC even though the advisers do not meet the eligibility requirements for federal registration in Section 203A. The Internet Adviser