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The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed in July by President Obama. This will require most financial advisors who have up to $100 Million in assets under management to register through the state instead of the SEC. Previously, advisors only had to register with the state if they had less than $30 Million in assets under management. The process of registering through the state is more time consuming and complex than registering with the SEC.

This will not affect advisors who 1) “act as advisors to an investment company registered under the Investment Company Act of 1940; 2) act as advisors to a company that has elected to be a business development company pursuant to Section 54 of the Investment Company Act of 1940 and has not withdrawn the election; 3) would be required to register with 15 or more states”, according to Scott Gottleib, President, U.S. Compliance Consultants, LLC.

If you are already registered with the SEC and are under $100 million in assets under management, do not withdraw from SEC registration before you receive your state registration. Once you remove your SEC registration, you will not be registered with any jurisdiction.

Having to register through the state can be frustrating because state regulators have no time constraint. Be prepared to wait more than the 45 days the SEC is confined to for registration. The average length of state registration could take from 60 to 90 days.