States could balk at taking on more firms to regulate (ThinkAdvisor)

The SEC may be considering transferring regulatory responsibilities of small and mid-size investment advisers to the states, but a number of states would likely resist this action. SEC Chairman Paul Atkins seems poised to move ahead with a plan to raise the $100 million assets under management threshold that requires SEC registration as an investment adviser. If that happens, thousands of firms below the new threshold could fall back to state regulation, with many states unprepared to handle the additional workload. Amy Lynch, FrontLine’s Founder and President, believes that many states would fight to prevent having more firms to regulate because of limited funding and lack of resources. The firms themselves may also face stricter rules in some states, requiring additional compliance needs. The SEC has suggested the change is necessary, citing the large increase of investment advisers registered with the SEC since the 2010 Dodd-Frank Act requirement coupled with its reduced workforce.See ThinkAdvisor, “SEC in Talks to Raise AUM Threshold for Advisor Registration”