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← Series 63: Regulation of Investment Advisers
Series 63 practice questionhardIA registration at threshold crossings

Which statement about a state-registered investment adviser whose regulatory assets under management fluctuate near $100 million is TRUE?

  1. AThe adviser must immediately switch to SEC registration upon reaching $100 million
  2. BThe IA generally transitions after reporting at least $110 million on its annual updating amendment✓ Correct answer
  3. CThe adviser must register with both the SEC and the states whenever AUM exceeds $100 million
  4. DThe adviser must wait until AUM reaches $150 million before SEC registration is permitted
Explanation

Why B — The IA generally transitions after reporting at least $110 million on its annual updating amendment

The $100 million to $110 million buffer prevents an immediate mandatory switch at $100 million. A state-registered adviser generally must apply for SEC registration after reporting at least $110 million on its annual updating amendment.

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