SEC or State Registration for Investment Advisers: The AUM Thresholds and How to Decide

An investment adviser with $100 million or more of regulatory assets under management may register with the SEC, and must register with the SEC once it reaches $110 million. Below $100 million an adviser generally registers with the securities regulator of the state where it has its principal office, unless a specific exception allows or requires SEC registration. An SEC-registered adviser need not move back to the states unless its assets fall below $90 million, and an adviser whose principal office is outside the United States may register with the SEC at any size.

This guide explains the thresholds, how to calculate the number that decides them, the exceptions, the deadlines for switching regulator and a practical way to decide. Our US investment adviser registration page covers the full process, and the SEC investment adviser and broker-dealer overview covers both US investment registrations together.

The thresholds at a glance

Federal law divides advisers between the SEC and the states. The SEC sets a buffer around the $100 million line in Rule 203A-1 so that an adviser whose assets move up and down does not have to switch regulator every year.

The SEC filing fee follows the same bands: $40 below $25 million, $150 from $25 million to $100 million and $225 from $100 million, paid on the first filing and on each annual update through the Investment Adviser Registration Depository (IARD), the online filing system FINRA runs for the SEC and the states.

How to calculate regulatory assets under management

The number that matters is regulatory assets under management, reported in Item 5.F of Form ADV Part 1A. It is a defined term and is often different from the figure a firm uses in marketing. Instruction 5.b of the Form ADV instructions sets the method.

• Count securities portfolios: accounts where at least half the value is securities. Cash and bank deposits may be counted as securities for this 50% test.
• Count only accounts that receive continuous and regular supervisory or management services. Ongoing discretionary management qualifies, and so does ongoing monitoring where the adviser is responsible for arranging trades. A one-off asset allocation does not.
• Include family and proprietary accounts, accounts where the adviser is not paid and accounts of clients who are not US persons.
• For a private fund, treat all of the fund's assets as a securities portfolio, whatever they are, and add any uncalled capital commitments from investors.
• Use gross value. Do not deduct borrowings or accrued but unpaid liabilities.
• Leave out the part of an account that another firm manages.

Two adjustments catch firms out. Private fund managers who count only drawn capital understate their figure, because uncalled commitments count. Wealth managers who count only fee-paying accounts also understate it, because family and unpaid accounts count. Both errors can put a firm on the wrong side of the $100 million line and change its regulator.

When a smaller adviser can or must register with the SEC

Most advisers below $100 million are prohibited from registering with the SEC. The prohibition has specific exceptions, set out in section 203A of the Advisers Act, Rule 203A-2 and the Form ADV instructions.

If none of these applies and assets are below $100 million, the adviser registers with the states. State registration is not a lesser licence. States examine their advisers, set their own rules on matters such as financial requirements and custody, and register the firm's individual advisers.

Non-US advisers: three routes

A manager based in London, Dublin, Singapore or elsewhere is not bound by the $100 million line in the same way. The Form ADV instructions allow an adviser whose principal office and place of business is outside the United States to register with the SEC regardless of its size. That leaves three realistic routes.

• Foreign private adviser exemption: no US place of business, fewer than 15 US clients and US investors in its private funds, less than $25 million of assets attributable to them, and no holding out to the US public as an investment adviser. The adviser files nothing with the SEC under this exemption.
• Exempt reporting adviser: a non-US adviser that has no US clients other than qualifying private funds, and less than $150 million of private fund assets managed from a US place of business, can rely on the private fund adviser exemption. It files a shortened Form ADV Part 1A within 60 days, updates it annually and pays $150 per filing. An adviser that advises only venture capital funds can rely on the venture capital exemption, which has no asset limit.
• Full SEC registration of the non-US adviser: the route for a manager with separately managed accounts, more US clients than the exemptions allow, or US retail clients.

A manager that wants a US team, a US office or broad US retail distribution often forms a US adviser instead. That entity then follows the same $100 million test as any US adviser.

Switching between state and SEC registration

The annual Form ADV update is where most switches are triggered. It is due within 90 days of the adviser's financial year end, so 31 March 2027 for a firm whose year ends on 31 December 2026, and it must report the adviser's current regulatory assets under management and the basis on which it is registered.

While an adviser is moving from the SEC to the states, it can be registered with both for a period, and both the Advisers Act and state law apply to it during that time.

What actually changes once you choose

The registration route changes the regulator, the examiner and several rules, not just the filing address.

• An SEC-registered adviser must adopt written compliance policies, appoint a chief compliance officer and review the programme at least once a year under Rule 206(4)-7. States apply their own equivalents.
• An SEC-registered adviser files Form CRS, a short relationship summary, if it has retail investors.
• SEC-registered advisers make notice filings, and pay notice fees, in states that require them, but are not registered by those states.
• Investment adviser representatives register with the states whichever route the firm takes, normally after passing the Series 65 or the Series 66 with the Series 7.
• SEC-registered advisers with at least $150 million of private fund assets file Form PF.
• FinCEN's anti-money laundering rule for advisers covers SEC-registered advisers and exempt reporting advisers, not state-registered advisers, from 1 January 2028.

The last point matters for planning. An adviser approaching $100 million that chooses SEC registration also brings itself within the FinCEN rule when it takes effect. Our guide to annual obligations for US advisers and broker-dealers sets out the full year.

A five-step way to decide

• Step 1: calculate regulatory assets under management on the Form ADV basis as at the filing date, including uncalled commitments and every account that receives continuous and regular management.
• Step 2: if the figure is $110 million or more, register with the SEC. If it is $100 million to $110 million, decide whether you expect to stay above $100 million, since moving to the SEC and back again is costly.
• Step 3: if the figure is below $100 million, test each exception in the table above in order, starting with your home state and whether you advise a registered fund.
• Step 4: if your principal office is outside the United States, compare the foreign private adviser exemption, exempt reporting adviser status and direct SEC registration before forming a US entity.
• Step 5: record the basis for your decision in the compliance file and diarise the next annual update, because the test is repeated every year.

If the business also executes or arranges securities trades for clients, it may need a broker-dealer as well as an adviser. Our guide to the FINRA New Member Application explains that process.

Dates that affect the decision in 2026 to 2028

Two SEC proposals may change the picture for some firms. On 20 April 2026 the SEC and CFTC proposed raising the Form PF filing threshold from $150 million to $1 billion of private fund assets. On 3 September 2026 the SEC proposed rescinding the political contribution rule for advisers. Neither is final, and the current rules apply until they are.

Common mistakes

• Using net assets or assets under advice instead of regulatory assets under management.
• Assuming a mid-sized adviser can choose the SEC. Outside New York and the listed exceptions, it cannot.
• Registering with the SEC on a 120-day expectation and then missing the threshold, which forces a withdrawal.
• Forgetting state notice filings after SEC registration, or forgetting that representatives still register with the states.
• Treating exempt reporting adviser status as outside regulation. Exempt reporting advisers file with the SEC, can be examined and are covered by the FinCEN rule from 2028.

For investment and wealth firms working across the UK and US, our investment and wealth firms page sets out how we support both regimes.