Waiver of Fees Continues for IARD Filings

November 3, 2008

On October 30, 2008, the Securities and Exchange Commission (the “SEC”) issued Release No. IA-2806, “Approval of Investment Adviser Registration Depository Filing Fees” (the “Release”).  Acting at the request of the Financial Industry Regulatory Authority (“FINRA”), and using its authority under Sections 204(b) and 206A of the Investment Advisers Act of 1940 (15 USC Chapter 2D et seq.), the SEC waived filing fees from November 1, 2008 through July 31, 2009 for:

- annual updating amendments to Form ADV filed by SEC-registered investment advisers, and

- initial applications to register as an investment adviser with the SEC.

Fees for annual updating amendments have been waived since 2005; since 2006, the SEC has waived fees for initial applications to register as an investment adviser. 

When the SEC designated FINRA’s predecessor as the operator of the Investment Adviser Registration Depository (“IARD”) system in 2000, the SEC established a system of filing fees and required advisers registered or registering with the SEC to file Form ADV through the IARD.  The IARD system is used by both SEC- and state-registered investment advisers.  The North American Securities Administrators Association, Inc. establishes IARD filing fees for state-registered advisers.  At present, more than 11,000 advisers now use the IARD for Internet-based SEC and state filings.

Assumed expenses of the IARD system did not keep pace with the fee schedule as initially established.  In its October 26, 2006 Release No. IA-2564, also entitled “Approval of Investment Adviser Registration Depository Filing Fees,” the SEC found that many managers’ funds under management increased, moving their fees into a higher category.  By 2005, the surplus was $9 million, and the SEC began waiving various fees as a means of reducing the surplus.  Even after the 9-month waiver under the Release, the SEC projects the surplus to equal $3.7 million. 

While prior waivers have been for yearly periods, the Release waives fees only through July 2009 to correspond to the expiration of the SEC’s contract with FINRA to operate the IARD.

For additional information on this topic, you may contact Howard A. Neuman or Carol Spawn Desmond.