Regulatory Alerts2021-11-10 | 2021-24525Added · Updated
Performance-Based Investment Advisory Fees
The Securities and Exchange Commission adopted amendments to Rule 205-3 under the Investment Advisers Act of 1940 to update the definition of 'qualified client' for performance-based fee exemptions. The rule replaces static dollar amount thresholds with references to the Commission's most recent inflation-adjusted order, ensuring the regulation automatically aligns with current statutory requirements. These changes also update the reference date for future five-year inflation adjustments to May 1, 2026, while maintaining the existing substantive standards for adviser compensation.
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