From Deadlines to Lifelines

However, in an April 8, 2011 letter, Robert Plaze, associate director of the SEC’s Division of Investment Management, explained that once the final transition rules are implemented, the Investment Adviser Registration Depository system (IARD) will need to be reprogrammed to accept the transition filings. Because the SEC expects that the IARD reprogramming will take a significant amount of time, Plaze “expects that the Commission will consider extending the date by which [SEC-registered] midsized advisors [a term yet to be defined by the SEC] must transition to state regulation such that all SEC-registered advisors would be required to report their eligibility for SEC registration with the Commission in the first quarter of 2012.” After that time, those advisors who are no longer eligible for SEC registration (having less than $100 million in assets under management) will have a grace period with which to de-register with the SEC and become registered with the appropriate state authorities.

The second potential extension pertains to required registration of general partners/managing members to certain private investment funds as SEC investment advisors. Pursuant to the Dodd-Frank Act, by July 21, 2011, the general partner or managing member of any private investment fund must register as a registered investment advisor unless the general partner or managing member is already a registered investment advisor; or has aggregate assets under management in private funds of less than $150 million. However, while no change has yet been made, the SEC recently wrote a letter to the North American Securities Administrators Association stating that it was considering an extension of the deadline until sometime in the first quarter of 2012. Accordingly, while all firms should be preparing to meet the July 21, 2011 deadline, be aware that there is the possibility that additional time to meet these requirements either for registration or to change registration will be in the offing.