WASHINGTON BUREAU — The U.S. Securities and Exchange Commission (SEC) has approved a final rule that will put about 3,200 investment advisors who have been regulated by the SEC under state oversight.

The final rule, approved by the SEC Wednesday, is set to take effect Tuesday,

The SEC developed the rule to implement changes in the Investment Advisers Act of 1940 that were made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Title IV of the Dodd-Frank Act has required the SEC to shift many advisors who manage $25 million to $100 million in assets to state regulation.

States already have been regulating advisors with less than $25 million in assets.

Several hundred advisors with $25 million to $100 million in assets that operate in Minnesota, New York or Wyoming will continue to be subject to SEC oversight, because Dodd-Frank required the SEC to ask each state whether it would accept responsibility for regulating midsize advisors. Securities regulators in Minnesota, Minnesota and New York have told the SEC they do not plan to oversee midsized advisors.

Another Dodd-Frank Act provision has eliminated a “private advisor” exemption that had freed about 750 advisors from the need to register with the SEC. The exemption has applied to advisors whose only clients are “private funds” and that manage less than $150 million in the United States.

To implement the Dodd-Frank changes, the SEC has adopted new exempt advisor reporting requirements. These include a requirement for “exempt reporting advisors” to file portions of Part 1 of Form ADV.

The SEC has agreed to delay the effect of the new registration and reporting deadlines until March 30, 2012, for advisors that must register with the SEC because of the elimination of the private advisor exemption, according to lawyers at Goodwin Procter L.L.P., New York.

Item 5 of Part 1A requires registered advisors to describe their operations. New amendments will require an advisor to indicate how many of the advisors are registered advisor representatives and how many

are insurance agents. The SEC also added an option for “insurance companies” to a list of possible responses to a question about the types of clients an advisor represents.

SEC Chairman Mary Schapiro says the SEC has no current intention of subjecting exempt reporting advisors to routine examinations

“As many observers know, the commission has scarce resources, and it is important therefore that we target those resources toward the [advisors] that are actually registered with us, where the investing public expects us to be focused,” Schapiro said at the meeting Wednesday, according to a written version of her remarks posted by the SEC. “At the same time, if there are indications that we should conduct an on-site visit of an exempt but reporting investment [advisor], we legitimately and appropriately will have the ability to do so.”

The new final rule will create a uniform method of calculating assets under management for Form ADV and eliminate provisions that have let advisors exclude some assets from asset totals, SEC officials say in the preamble to the final rule.

The SEC also adopted a rule as proposed in November that will “grandfather” advisors that serve some venture capital funds.

A venture capital fund advisor may qualify for grandfathering if the first closing came before Dec. 31, 2010, and no new capital commitments are made after July 21, 2011, according to lawyers at Goodwin Procter.

All other advisors must make a filing in the first quarter of 2012, and the previously registered advisors that no longer qualify for SEC registration must withdraw by June 28, 2012, the Goodwin Procter lawyers say.

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