One of the first decisions a new investment adviser faces is where to register: with the state, or with the SEC. The answer turns largely on assets under management, and getting it wrong is not a formality, because it determines who regulates and examines you.
In broad terms, smaller advisers register with the securities regulator of each state where they operate, and larger advisers register with the SEC. Between them sits a mid-sized band with its own rules about when SEC registration becomes available or required. The exact thresholds are set by regulation and should be confirmed against current figures, but the structure, small to states, large to SEC, is the frame.
State and SEC registration differ in who conducts exams, what must be filed, and some substantive requirements. A state-registered adviser answers to state examiners and may face different net-worth or bonding rules; an SEC-registered adviser answers to the SEC. Operating in multiple states as a state-registered adviser can also mean multiple registrations.
Because the thresholds move and the mid-range has nuances, an adviser should confirm its status deliberately rather than assume, and re-check as assets grow across a threshold, since crossing one can require switching regulators. This is a foundational determination, not a detail.
The number decides the regulator.
Greenridge L&C Advisors is a compliance consultancy, not a law firm. This is general information, not legal advice.