Are you a Wyoming-based adviser?  If so, a new law may apply to you.

July 4, 2017

Last year we posted the news that Wyoming was going to start regulating mid-sized investment advisers.  How quickly a year passes!

Starting July 1, 2017, Wyoming law has changed:  a new Wyoming state statute regulates investment advisers with a principal office and place of business in Wyoming that manage more than $25 million but less than $100 million in regulatory assets.  The net effect is that such Wyoming advisers will be regulated and supervised under Wyoming law and are no longer eligible for SEC registration, unless they are managing more than $100 million in regulatory assets, advise a registered investment company, or are eligible to rely on one of the exemptions from the prohibition on registration contained in Rule 203A-2 under the Investment Advisers Act of 1940.

Information re:  the Wyoming statute is available here:  https://soswy.state.wy.us/Investing/Docs/Wyoming_Securities_Act_Effective_07-01-2017.pdf --> NOTE:  see, Sections 17-4-403 and thereafter, starting on page 69.

The Wyoming statute has had two knock-on effects at the SEC:

1.   The SEC made technical amendments to Form ADV to note that small to mid-sized advisers are subject to Wyoming regulation and not eligible for SEC registration.   See, Technical Amendments to Form ADV and Form ADV-W, Release No. IA-4698, May 4, 2017

2.    The SEC updated its FAQs re:  mid-sized advisers.  See, Information Update, IM-INFO-2017-05, June 2017; and Division of Investment Management:  Frequently Asked Questions Regarding Mid-Sized Advisers, Modified: 06/30/2017

Posted by Karl Hartmann, July 4, 2017