The Securities and Exchange Commission (SEC) is proposing amendments to guidance permitting certain investment advisers providing investment advisory services through the internet to register with the Commission.
According to the SEC, the proposed amendments generally would require an investment adviser relying on the internet adviser registration rule to have at all times an operational interactive website through which the adviser provides digital investment advisory services on an ongoing basis to more than one client.
“In 2002, the SEC granted what was intended to be a narrow exception allowing internet-based advisers to register with the Commission instead of with the states,” SEC Chair Gary Gensler said. “A lot has changed in the 21 years since, and I believe an exemption written in 2002 allows gaps in 2023.”
Gensler said the proposal would modernize the internet advisers exemption to align registration requirements with modern technology and assist the Commission in the efficient and effective oversight of registered investment advisers.
Additionally, the proposed amendments would eliminate the de minimis exception from the current rule by proposing to require that an internet investment adviser provide advice to all of its clients exclusively through an operational interactive website, and make certain corresponding changes to Form ADV, the SEC noted.
The proposing release will be published in the Federal Register, per the SEC, and the public comment period will remain open until 60 days after the date of publication of the proposing release in the Federal Register.