Are You an ERA Considering RIA Registration?

By Craig Moreshead, Managing Director

Exempt Reporting Advisers (“ERAs”) may become ineligible for exemption from Registered Investment Adviser ("RIA") registration either because their private fund assets under management exceed $150m or because the adviser has agreed to take on a client that is not a private fund.
 
Following the SEC’s prescribed transition process and timeline is critical for an ERA to ensure compliance and continuity of operations. Once an ERA exceeds the $150m threshold and becomes ineligible for the private fund adviser exemption, the adviser has a 90-day grace period where it may continue to operate as a private fund adviser until it is RIA registered. 

Importantly, ERAs that fail to comply with SEC reporting requirements cannot avail themselves of the 90-day grace period and must immediately register as an RIA (meaning there will be a period of time where the adviser will be unable to operate as a private fund adviser or charge fees for advisory services).

If your ERA is contemplating a transition to SEC RIA registration or is on the verge of losing its exemption, now is the time to plan ahead.

Chenery Compliance Group is dedicated to providing compliance support to ERAs and registered private fund advisers. We’d like to offer you a courtesy consultation with one of our senior compliance professionals to answer any questions you might have. To schedule time with one of our experts reach out to us here.