[ by Howard Haykin ] March 30, 2012 was a critical compliance date for investment advisers - as newly defined under the Dodd-Frank Act.  On that date amendments were implemented to the Investment Advisers Act of 1940 [see Rules Implementing Amendments to the IA Act of 1940] - namely:

• advisers to many hedge funds, private equity funds, and other "private funds" that previously were exempt from registration were required to register with the Commission;
• exempt reporting advisers - i.e., unregistered advisers to venture capital funds and to private funds with <$150 million in assets) - were required to submit reports on Form ADV for the first time; and
• mid-sized advisers - i.e., advisers with between $25 million and $100 million in assets under management ("AUM") subject to examination by state regulators switching to state registration were required to amend their Form ADVs reporting that they are no longer eligible to remain registered with the SEC.

Staffer members of the Division of Investment Management Guidance prepared the summary below of the preliminary results of these changes.  Unless otherwise noted, all data is as of 4/4/12. Registered Private Fund Advisers. Approximately 3,990 investment advisers that manage one or more private funds registered with the Commission, of which 34% (1,369) registered since the effective date of the Dodd-Frank Act (July 21, 2011).  It's estimated that this represents a 52% increase in registered private fund advisers; 32% of all advisers currently registered with the Commission report that they advise at least one private fund.  Of the 3,990 registered private fund advisers, 284 (7%) are domiciled in a foreign country - most (136) are domiciled in the U.K. Registered private fund advisers report to us that they advise 30,617 private funds with total assets of $8 trillion, which is 16% of total assets managed by all registered advisers.  Approximately 31% of private fund total assets are attributable to advisers that registered since the effective date of the Dodd-Frank Act.  Hedge funds (53%) and private equity funds (24%) comprised the majority of private fund assets managed by registered advisers. Exempt Reporting Advisers. Some 1,950 exempt reporting advisers filed Form ADVs with the SEC - a large number of which (41%) are foreign advisers.  Exempt reporting advisers reported to us that they advise 6,702 private funds with total assets of $1.5 trillion. Anticipated Impact on Population of Registered Advisers. There are 12,623 advisers registered with the SEC with total assets under management ("AUM") of $48.8 trillion.  Based on data recently submitted by advisers, the staff expects 2,400 mid-sized advisers will switch to state registration by 6/28/12, resulting in approximately 10,000 advisers with $48.6 trillion in AUM registered with the Commission. Using these projections, the staff anticipates that the cumulative impact of the Dodd-Frank Act registration changes will be a 25% decrease in the number of advisers registered with the SEC, but a 12% increase in the total AUM of those registered advisers. For further details, go to:  [SEC IA Registration Advisory, 6/13/12].