the investment adviser provides investment advice to more than 15 clients?
Yes, such an investment adviser receiving performance fees is subject to the Rule 205-3 limitations. The SEC Chief Counsel’s office takes the position that, if the only reason the advisor isn’t registered with the SEC is because it has under 25 million, then the prohibition of Section 205 of the Investment Advisers Act and the exemption contained Investment Advisers Act Rule 205-3 apply. If the Advisor fits into one of the 203(b) exemptions (for example, has less than 15 clients + not advising a registered IC + no holding out to the public), then the prohibition of Section 205 of the Investment Advisers Act and the exemption contained Investment Advisers Act Rule 205-3 do not apply, regardless of whether the Advisor is prohibited from registering with the SEC.
Related Questions
- I have an investment product from one of the Lloyds Banking Group brands. Can I still get financial advice from a Personal Financial Adviser from one of the other of the Group’s Brand?
- Do I need the Series 65 exam if Im just getting referral fees from an investment adviser for clients that I soliciting?
- How does an investment Adviser, financial planner, CPA, or other Adviser work with Family Office Services?
