Section 204(b) of the Investment Advisers Act of 1940 authorizes the SEC to require investment advisers to file applications and other documents through an entity designated by the SEC, and to pay reasonable costs associated with such filings. In 2000, the SEC designated the Financial Industry Regulatory Authority Regulation, Inc., or FINRA, as the operator of the Investment Adviser Registration Depository, or IARD system. At the same time, the SEC approved, as reasonable, filing fees.
FINRA has written to SEC staff, recommending revised annual and initial IARD filing fees commence on January 1, 2011. The new recommended fee levels would increase the fee for advisers with assets under management of $100 million or higher, but would not change the fee levels for advisers with assets under management under $100 million. The recommended annual filing fees due beginning January 1, 2011 are $40 for advisers with assets under management under $25 million; $150 for advisers with assets under management from $25 million to $100 million; and $225 for advisers with assets under management of $100 million or higher. The recommended initial IARD filing fees due beginning January 1, 2011 are $40 for advisers with assets under management under $25 million; $150 for advisers with assets under management from $25 million to $100 million; and $225 for advisers with assets under management of $100 million or higher. Based on projections of expected revenues and expenses and taking into account an expected reduction in the number of advisers registered or reporting to the SEC as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC believes these revised fee levels would be reasonable, as the SEC projects that they will provide adequate funding to cover IARD system expenditures. This reduction in fees is expected to reduce aggregate filing fees that SEC-registered advisers would incur by approximately $2 million annually compared to the filing fees that would be collected based on the fee levels established in 2000. The revised filing fees will apply to all annual updating amendments filed by SEC-registered advisers beginning January 1, 2011 and to all initial applications for registration filed by advisers applying for SEC registration beginning January 1, 2011.
An order approving the IARD filing fees will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC’s Secretary. Hearing requests should be received by the SEC by 5:30 p.m. on December 21, 2010.
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