SEC Adopts Revised Investment Adviser Performance Fee Requirements

February 21, 2012
Client Alert

The Securities and Exchange Commission recently adopted amendments to the dollar amount tests for the “qualified client” definition in Rule 205-3 under the Investment Advisers Act of 1940. Rule 205-3 provides exemptions from the general Advisers Act prohibition on performance-based compensation for registered investment advisers. The revised rule changes the current $750,000 assets under management test to $1 million and changes the current $1.5 million net worth test to $2 million. The SEC also amended Rule 205-3 to:

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