SEC Release: Investment Adviser Performance Compensation

SEC Release No. IA-3198

May 10, 2011

The SEC published a proposal to raise certain dollar thresholds that would need to be met before an investment adviser could charge clients performance fees. The amendments, which are required under Title IV of Dodd-Frank, would amend the client asset requirements in IAA Rule 205-3 to $1 million for assets under management and $2 million net worth (from $750,000, and $1.5 million, respectively). The proposal would also, among other things, provide a method for calculating future inflation adjustments to the dollar amounts.

Cross References

SEC Press Release No. 2011-109

Advisers Act Rule 205-3

Dodd-Frank § 418