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← Series 63: Regulation of Investment Advisers
Series 63 practice questioneasyFederal vs. state registration triggers

A registered investment adviser (IA) in State A increases its AUM from $90 million to $110 million. What is the firm's MOST LIKELY regulatory obligation?

  1. ARegister with the SEC after the annual updating amendment if AUM remains at or above $110 million, then withdraw state registration as required✓ Correct answer
  2. BNotify State A’s Administrator immediately
  3. CContinue registering only in State A
  4. DWithdraw its registration and become exempt under the de minimis rule
Explanation

Why A — Register with the SEC after the annual updating amendment if AUM remains at or above $110 million, then withdraw state registration as required

When a mid-sized adviser reaches at least $110 million in regulatory AUM, SEC registration is generally required based on the annual updating amendment framework. The adviser does not switch merely because it crossed $100 million intrayear; the key threshold is $110 million at the annual update, followed by the required transition and state withdrawal process.

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