On July 12, 2011, the Securities and Exchange Commission (SEC) issued an order raising the asset thresholds for individuals to meet the “qualified client” standard under Rule 205-3 of the Investment Advisers Act of 1940 (Advisers Act).  The Advisers Act generally prohibits registered investment advisers from charging performance fees to clients other than qualified clients.  The Dodd-Frank Wall Street Reform and Consumer Protection Act  requires the SEC to update the qualified client standard to adjust for inflation no later than July 21, 2011, and requires additional adjustments for inflation every five years thereafter.

Source: Investment Management Alert
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