New U.S. SEC Exemption Provides Relief for Internet Investment Advisors

Recently, the United States Securities Exchange Commission ("SEC") adopted a new Rule which permits Internet Investment Advisors to register with the SEC. Prior to the new rule, investment advisors who provided advisory services over the Internet were prohibited from registering with the Commission because they did not fall within the provisions of section 203A of the Investment Advisers Act of 1940. Section 203A prohibits an advisor from registering with the Commission unless they are an advisor with a registered investment company or have more than $25 million of assets under management. As a result, Internet Investment Advisors were generally required to register with every State. The new rule, 203A-2(f), exempts advisors, who provide investment advice solely through a website, from the registration prohibition. To view the SEC's statement regarding the Rule, visit: http://www.sec.gov/rules/final/ia-2091.htm