SEC Amends Exemption for Certain Investment Advisers Operating Through the Internet

The SEC has released a final rule that amends Rule 203A-2(e) of the Investment Advisers Act of 1940, which “exempts certain investment advisers that provide advisory services through the internet . . . from the prohibition on Commission registration.” In addition, conforming amendments would be made to Form ADV, the SEC’s registration form for investment advisers.

Under the amendments, investment advisers that rely on the exemption will be required to maintain an operational and interactive Web site and to provide clients with investment advice exclusively through this Web site. The primary purpose of the final rule’s amendments is to account for technological advancements, as well as changes in the investment advisory industry, that have occurred since the exemption was initially adopted in 2002.

For more information, see the press release and fact sheet — as well as the statement by SEC Chair Gary Gensler — on the SEC’s Web site.