What is the minimum AUM for an adviser to register with the SEC?

The minimum assets under management (AUM) required for an investment adviser to register with the Securities and Exchange Commission (SEC) is indeed above $100 million. This threshold was established to focus regulatory oversight on larger investment advisers who tend to serve institutional investors and have a more significant impact on the financial markets.

Advisers managing over this minimum amount can take advantage of the SEC’s resources and infrastructure, which are designed to monitor and regulate firms of this scale effectively. By requiring a higher AUM for SEC registration, regulatory authorities aim to improve market stability and investor protection by taking a closer look at those firms that manage a substantial amount of capital.

Firms with AUM below $100 million are generally required to register with state regulators instead, as they are considered to be operating at a scale that may not warrant the same level of oversight required at the federal level. This registration criterion reflects a regulatory approach intended to allocate federal oversight resources efficiently based on the size and complexity of the advisory firms.

Therefore, understanding this AUM threshold is crucial for compliance professionals and advisers, as it delineates their registration obligations and informs their operational risk management strategies.