[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Notices]
[Pages 76499-76500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30701]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IA-3119; File No. S7-38-10]
Approval of Investment Adviser Registration Depository Filing
Fees
AGENCY: Securities and Exchange Commission.
ACTION: Notice of intent to charge revised IARD filing fees for
advisers registering with or registered with the Commission.
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SUMMARY: The Securities and Exchange Commission (``Commission'' or
``SEC'') is revising Investment Adviser Registration Depository annual
and initial filing fees that will be charged beginning January 1, 2011.
Hearing or Notification of Hearing: An order approving the IARD
filing fees will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary. Hearing requests should be received by the SEC by 5:30 p.m.
on December 21, 2010. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons may request notification of a hearing by writing to
the Commission's Secretary.
ADDRESSES: Elizabeth M. Murphy, Secretary, Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-1090.
FOR FURTHER INFORMATION CONTACT: Keith Kanyan, IARD System Manager, at
202-551-6737, or [email protected], Office of Investment Adviser
Regulation, Division of Investment Management, Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-8549.
SUPPLEMENTARY INFORMATION: Section 204(b) of the Investment Advisers
Act of 1940 (``Advisers Act'') authorizes the Commission to require
investment advisers to file applications and other documents through an
entity designated by the Commission, and to pay reasonable costs
associated with such filings.\1\ In 2000, the Commission designated the
Financial Industry Regulatory Authority Regulation, Inc. (``FINRA'') as
the operator of the Investment Adviser Registration Depository
(``IARD'') system. At the same time, the Commission approved, as
reasonable, filing fees.\2\ The Commission later required advisers
registered or registering with the SEC to file Form ADV through the
IARD.\3\ Over 11,000 advisers currently use the IARD system to register
with the SEC and make state notice filings electronically through the
Internet.
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\1\ 15 U.S.C. 80b-4(b).
\2\ Designation of NASD Regulation, Inc., to Establish and
Maintain the Investment Adviser Registration Depository; Approval of
IARD Fees, Investment Advisers Act Release No. 1888 (July 28, 2000)
[65 FR 47807 (Aug. 3, 2000)]. FINRA was formerly known as NASD.
\3\ Electronic Filing by Investment Advisers; Amendments to Form
ADV, Investment Advisers Act Release No. 1897 (Sept. 12, 2000) [65
FR 57438 (Sept. 22, 2000)].
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Commission staff, representatives of the North American Securities
Administrators Association, Inc. (``NASAA''),\4\ and representatives of
FINRA periodically hold discussions on IARD system finances. In the
early years of operations, SEC-associated IARD revenues exceeded
projections while SEC-associated IARD expenses were lower than
estimated, resulting in a surplus. In 2005, FINRA wrote a letter to SEC
staff recommending a waiver of annual fees for a one-year period.\5\
The Commission concluded that this was appropriate and waived annual
fees.\6\ In 2006, 2008, and 2009 FINRA wrote to the staff again,
recommending a two-year, a nine-month, and a five-month waiver,
respectively, of all fees to continue to reduce the surplus.\7\ The
Commission agreed and issued orders waiving all IARD fees.\8\ At the
conclusion of the 2009 waiver, FINRA wrote to the staff again,
recommending reduced levels of fees be charged in
[[Page 76500]]
2010.\9\ The Commission concluded this was appropriate and issued an
order reducing the level of fees charged for one year.\10\ As a result
of the four waivers and reduced fee levels, the surplus was reduced
from $9 million in 2005 to a level of approximately $3 million.
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\4\ The IARD system is used by both advisers registering or
registered with the SEC and advisers registered or registering with
one or more state securities authorities. NASAA represents the state
securities administrators in setting IARD filing fees for state-
registered advisers.
\5\ NASD letter dated September 9, 2005, available at http://www.sec.gov/rules/other/nasdlet090905.pdf.
\6\ Approval of Investment Adviser Registration Depository
Filing Fees, Investment Advisers Act Release No. 2439 (Oct. 7, 2005)
[70 FR 59789 (Oct. 13, 2005)].
\7\ NASD letter dated October 13, 2006 and FINRA letters dated
October 10, 2008 and July 8, 2009 available at http://www.sec.gov/rules/other/2006/nasdletter101306-iardfee.pdf, http://www.sec.gov/rules/other/2008/finraletter101008-iardfees.pdf, and http://www.sec.gov/rules/other/2009/finraletter070809-iardfees.pdf,
respectively.
\8\ Approval of Investment Adviser Registration Depository
Filing Fees, Investment Advisers Act Release No. 2564 (Oct. 26,
2006), Investment Advisers Act Release No. 2806 (Oct. 30, 2008) [73
FR 65900 (Nov. 5. 2008)], and Investment Advisers Act Release No.
2909 (July 31, 2009) [74 FR 39352 (Aug. 6, 2009)].
\9\ FINRA letter dated September 29, 2009, available at http://www.sec.gov/rules/other/2009/finraletter092909-iardfees.pdf.
\10\ Approval of Investment Adviser Registration Depository
Filing Fees, Investment Advisers Act Release No. 2959 (Dec. 10,
2009) [74 FR 66710 (Dec. 16, 2009)].
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FINRA has again written to Commission staff, recommending revised
annual and initial IARD filing fees commence on January 1, 2011.\11\
The new recommended fee levels would increase the fee for advisers with
assets under management of $100 million or higher, but would not change
the fee levels for advisers with assets under management under $100
million.\12\ The recommended annual filing fees due beginning January
1, 2011 are $40 for advisers with assets under management under $25
million; $150 for advisers with assets under management from $25
million to $100 million; and $225 for advisers with assets under
management of $100 million or higher. The recommended initial IARD
filing fees due beginning January 1, 2011 are $40 for advisers with
assets under management under $25 million; $150 for advisers with
assets under management from $25 million to $100 million; and $225 for
advisers with assets under management of $100 million or higher. Based
on projections of expected revenues and expenses and taking into
account an expected reduction in the number of advisers registered or
reporting to the SEC as a result of the Dodd-Frank Wall Street Reform
and Consumer Protection Act,\13\ the Commission believes these revised
fee levels would be reasonable, as the Commission projects that they
will provide adequate funding to cover IARD system expenditures.\14\
This reduction in fees is expected to reduce aggregate filing fees that
SEC-registered advisers would incur by approximately $2 million
annually compared to the filing fees that would be collected based on
the fee levels established in 2000. The revised filing fees will apply
to all annual updating amendments filed by SEC-registered advisers
beginning January 1, 2011 and to all initial applications for
registration filed by advisers applying for SEC registration beginning
January 1, 2011. The Commission will reassess the fee levels and issue
orders, if necessary, to adjust these levels.
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\11\ FINRA letter dated November 12, 2010 available at http://www.sec.gov/rules/other/2010/finraletter111210-iardfees.pdf.
\12\ The revised fee level for advisers in the largest category
would newly include advisers that report assets under management of
exactly $100 million (not just over $100 million). We are making
this revision to track the new mid-sized adviser category for
advisers reporting assets under management of $25 million up to, but
not including, $100 million. See section 410 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (Pub. L. 111-203, 124
Stat. 1376 (2010).
\13\ The threshold, for most advisers, to be eligible for SEC
registration will be increased from $25 million to $100 million in
assets under management. The Dodd-Frank Wall Street Reform and
Consumer Protection Act (Pub. L. 111-203, 124 Stat. 1376 (2010).
\14\ The fee levels for advisers with assets under management
under $100 million are not changed as the number of advisers in
these categories are expected to fall as a result of the Dodd-Frank
Wall Street Reform and Consumer Protection Act.
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By the Commission.
Dated: December 2, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-30701 Filed 12-7-10; 8:45 am]
BILLING CODE 8011-01-P