On March 27, 2024, the U.S. Securities and Exchange Commission (“U.S. Securities and Exchange Commission”) passed amendments to narrow the rules that allow certain Internet investment advisers to register with the SEC (the “Internet Adviser Exemption”). look Section 203A-2(e) of the Investment Advisers Act of 1940, as amended.
The Internet Advisor Exemption allows advisors conducting business over the Internet to register with the Securities and Exchange Commission (SEC) instead of registering with the applicable state regulator, regardless of the amount of regulated assets the advisor manages.Prior to the amendment, exemptions included at the lowest limit An exception is allowed for Internet advisors who have fewer than 15 non-Internet clients in the past 12 months and still rely on the SEC registration exemption.
The main change brought about by the adopted amendment was the elimination of at the lowest limit exception.Investment advisors can only register with the SEC under the revised rules if they provide advice to all clients Only Through an actionable and interactive website. The compliance date for the revised rules is March 31, 2025.
For more information about the SEC staff’s views on Internet advisor operations, see Robo-Advisor Guidance Updates and Observations from the Review of Advisers Providing Electronic Investment Advice.
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