What is the threshold for SEC-registered advisers to notice file in various states?

The threshold for SEC-registered advisers to notice file in various states is indeed five clients. This is significant because it reflects the minimum number of clients an SEC-registered investment adviser can have in a state before they are required to file a notice with that state’s regulatory authority.

This requirement is designed to ensure that the states maintain oversight of investment advisers who are doing business within their jurisdiction, especially given that the SEC-registered advisers often operate on a national scale. Notice filing allows states to monitor these activities and enforce any regulatory requirements as necessary.

If the number of clients falls below this threshold, the adviser is typically not required to file, which can ease the administrative burden on smaller investment adviser firms that might not have a significant presence in a particular state. Understanding this threshold is crucial for compliance in practice, especially for advisers who may be expanding their client base across state lines.