SEC Compliance

Subscribe to SEC Compliance via RSS

Beginning on June 29, 2026 (the “Effective Date”), SEC-registered investment advisers charging performance-based fees (e.g. carried interest or performance allocation) and in certain cases exempt reporting advisers[1] (collectively, “Advisers”) must ensure that clients or private fund investors (“Investors”) meet updated “qualified client” thresholds under Section 205-3 of the Investment Advisers Act of 1940 (the “Advisers Act”). In April 2026, the SEC issued a final order that adjusts these dollar thresholds to account for inflation, affecting fee arrangements for many investment advisory relationships. Section 205(a)(1) of the Advisers Act generally prohibits investment advisers from entering into advisory contracts that compensate Advisers with performance-based fees based on a share of capital gains unless their Investors qualify as a “qualified client” under the Advisers Act.

As discussed in our previous article, “Raising Capital Through Private Placements Under Regulation D”, Regulation D provides exemptions to streamline capital raising and avoid the rigorous public disclosure requirements associated with public offerings. To perfect an offering under Regulation D, companies must file a notice of their offering with the Securities and Exchange Commission…

When a company is looking to raise third-party capital, it will frequently sell equity in the form of securities issued by the company.  The U.S. Securities Act of 1933 (as amended, the “Securities Act”) prohibits the sale of securities unless such securities are registered with the Securities and Exchange Commission (the “SEC”).  The registration process…

As financial markets and investors increasingly rely on instant access to data online, financial professionals are publishing more analyses through websites and social media than ever before.  Yet many financial professionals may be unaware of the fine line the Investment Advisers Act of 1940 (the “Advisers Act”) draws between (i) a bona fide…