Under new rules adopted by the SEC, all investment advisers registered with the SEC must file a Form ADV amendment by March 30, 2012 declaring their regulatory assets under management.  Those with AUM less than $90 Million (unless domiciled in New York, Minnesota, or Wyoming) must withdraw from registration by June 28, 2012.  Assets under management for this purpose includes securities portfolios for which the adviser provides "continuous and regular supervisory management services" and specifically includes (a) sub-advised assets, (b) private fund assets, (c) uncalled capital commitments, (d) proprietary assets, and (e) assets where no fee is paid.  To calculate the value, firms must use market value or fair value and not some other method such as cost or GAAP.  Firms currently unregistered or registered with a state must commence SEC registration once assets reach $110 Million.  Firms need not withdraw from SEC registration until assets fall below $90 Million per the most recent annual updating amendment. 

OUR TAKE: The SEC interpreted its jurisdiction as broadly as possible by lowering the mandatory withdrawal number to $90 Million, requiring fair valuation of assets, and broadly defining AUM.  Nevertheless, the SEC estimates that over 3,000 advisers will withdraw from SEC registration.