WASHINGTON BUREAU — The Securities and Exchange Commission (SEC) is considering a staff request that it delay until the first quarter of 2012 the date by which midsize advisors must transfer to state regulation.

Robert Plaze, associate director of the SEC’s Division of Investment Management, has discussed the SEC’s position in a letter to the president of the North American Securities Administrators Association, Washington.

Section 410 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the SEC to shift oversight of midsize advisors — those with $25 million to $100 million of assets under management — to state regulators. Current regulations call for the shift to occur July 21.

The shift will require the midsize advisors to withdraw from registration with the SEC and register with one or more states.

Once the SEC adopts the rules needed to implement the shift, the SEC’s Investment Adviser Registration Depository system (IARD) will have to be reprogrammed to accept advisors’ transition filings, and the SEC believes reprogramming the IARD system to handle the transition could take until the end of the year to complete.

Plaze says the SEC’s investment management unit expects the SEC to consider providing additional time for advisors affected by the new registration requirements to comply with the new rules and has proposed the first quarter of 2012 as the target date.

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