1. How New York Splits Sec and State Registration
The first question is not how you invest but which regulator holds your file. In New York, the answer turns on your assets under management and shapes every obligation that follows.
Where the Aum Thresholds Fall
An adviser managing under $25 million with its principal office in New York registers with the state, not the SEC. Once the firm crosses $25 million it moves toward federal registration, and at $100 million it registers with the SEC. Confirming your exact figure on the filing date keeps you from filing with the wrong authority.
The Mid-Sized Adviser Exception
In most states an adviser managing $25 million to $100 million registers at the state level. New York does not examine mid-sized advisers, so a New York firm in that range registers with the SEC instead. Local firms most often misread this point, and correcting it later means duplicate filings and lost time.
| Registration Path | Primary Regulator | Core Initial Filing | Key Ongoing Duty |
|---|---|---|---|
| Under $25M AUM, principal office in New York | New York Attorney General, Investor Protection Bureau | Form ADV via IARD, under the Martin Act | Keep Form ADV current under 13 NYCRR Part 11 |
| $25M to $100M AUM, New York adviser | U.S. Securities and Exchange Commission | Form ADV | Annual compliance review; Form PF for private funds |
| $100M or more AUM | U.S. Securities and Exchange Commission | Form ADV | Full SEC reporting and examination readiness |
2. What Registration Requires after You File
Registration begins an ongoing duty rather than closing a one-time submission. Two obligations draw the most scrutiny: an accurate Form ADV and a working compliance program.
Keeping Form Adv Current
Form ADV is the document regulators and clients read first, so it must match how the firm actually operates. Overstated performance, stale fee schedules, or an outdated conflicts disclosure create liability even when the underlying advice was sound. Amend it promptly after any material change to protect both the client and your regulatory record.
Building the Compliance Program Rule 206(4)-7 Expects
The Investment Advisers Act rule 206(4)-7 requires written policies, an annual review, and a designated chief compliance officer with real authority. Meeting the compliance officer requirements in practice, not just on paper, separates a defensible program from a hollow one. Strong RIA compliance ties each policy to a record that shows the firm followed it.
- A current Form ADV, Parts 1, 2A, and 2B, that matches actual practice
- A conflicts log tracking fees, soft-dollar use, and cross-trades
- Records showing each recommendation followed the stated process
- Proof that the annual compliance review actually took place
3. Custody Rules That Trip Up New York Advisers
Custody is a narrow concept with wide consequences, and many advisers hold it without realizing it. The rules aim to keep client assets beyond the manager's unilateral reach.
When You Are Deemed to Have Custody
You can hold custody without ever touching client cash, for example through fee-deduction authority or a role as general partner of a fund. That status pulls you into safekeeping rules that a purely advisory relationship avoids. Firms often miss it because they assume custody means physical possession alone.
Qualified Custodians and the Surprise Examination
Client assets generally must sit with a qualified custodian that sends account statements directly to clients. Holding custody beyond simple fee deduction can trigger a surprise annual verification by an independent public accountant for SEC-registered advisers, while state-registered firms follow New York's own custody requirements. Building these steps into operations early avoids a scramble when the requirement applies.
4. How State and Federal Oversight Differ Once You Register
Registration does not only pick a form to file; it picks who investigates you and under which law. That difference shapes both your exam risk and your exposure in a dispute.
Martin Act Reach for State-Registered Advisers
The New York Attorney General enforces the Martin Act, a broad anti-fraud statute that can reach misconduct without the intent-to-defraud showing many fraud claims demand. State-registered advisers operate under that statute alongside the rules in 13 NYCRR Part 11. The practical effect is that disclosure and marketing missteps can draw state scrutiny even when no client has complained.
Sec Examination and the Assets Buffer
SEC-registered advisers answer instead to the SEC's Division of Examinations, which tests whether written policies match actual conduct. A buffer built into the rules lets you stay federally registered through ordinary fluctuations, so you are not forced to switch back the moment assets dip below $100 million. Steady SEC compliance that aligns your files with current focus areas lowers the odds of a surprise inquiry, while the broader fiduciary duties behind that record sit in our asset management law overview.
5. Frequently Asked Questions
Is it better to stay state-registered or move to SEC registration in New York?
It stops being a choice once you cross $25 million in assets under management, because a New York adviser in the mid-sized range must register with the SEC. Below that figure, state registration under the Martin Act carries lighter reporting but still demands a current Form ADV. The practical move is to track your AUM against the threshold and prepare the federal filing before you reach it.
Do New York private fund managers have to file Form PF?
Many do, because Form PF applies to SEC-registered advisers that manage private funds above set asset levels. A general partner who assumes fund management sits outside routine reporting often learns of the filing late. Confirm your fund's reporting status early, since regulators treat a missed Form PF as a reporting failure rather than a paperwork delay.
What most often triggers an SEC examination for a New York investment adviser?
Examinations usually follow published risk areas such as fee calculation, marketing claims, and custody practices rather than random selection. A gap between your written policies and your actual conduct is the most common cause of an adverse finding. Firms that reconcile the two before an exam tend to close reviews without escalation.
6. Confirming Your Path before an Examiner Does
New York asset management law rewards firms that settle the registration question first and align their filings and compliance program to that answer. Start by confirming your assets under management, then check that Form ADV, custody arrangements, and the annual review all reflect current practice. Getting the regulator right early keeps a routine review from turning into an enforcement matter.
01 Jun, 2026
