1.4. Investment Advisers Act of 1940

A companion to the Investment Company Act, the Investment Advisers Act of 1940 requires investment advisers to register with an appropriate regulatory authority. More specifically, investment advisers who manage $110 million or more in client assets or who provide advice for an investment company must register with the SEC. Investment advisers who manage at least $100 million and less than $110 million in assets under management can choose to register on either the federal or the state level. Those managing less than $100 million must register with the regulatory agencies of the states in which they practice. If their state of residence does not require registration, investment advisers who manage client assets of less than $100 million must then register with the SEC.

The Investment Advisers Act of 1940 defines an investment adviser as:

Any person or firm that is in the business of providing advice or reports about securities for compensation.

Investment