What is the SEC and ‘SEC registered’?

The Securities and Exchange Commission

SEC stands for the Securities and Exchange Commission. This is an independent federal government regulatory agency, responsible for protecting investors, maintaining fair and orderly functioning of the securities markets and facilitating capital formation.

The SEC was created in 1934 as the first federal regulator of the securities markets, now consisting of 5 divions and 23 offices.

Registered Investment Adviser

A registered investment Adviser (RIA) is an Adviser who is registered with the SEC or State securities authorities. They must register with the SEC if they manage more than $100m in assets, and are able to (though not obligated to) register with the SEC if they manage at least $25m of assets. Typically, smaller Advisers / Firms must register with the State securities authorities. RIAs managing more than $100m have a quarterly duty to disclose their holdings to the SEC.

An SEC registered Adviser must naturally fulfil the requirements of the SEC in order to be registered, though as a regulatory body, this registration does not mean they are thereby endorsed by the SEC. RIAs must annually update their information on file with the SEC and this information must be publicly available, too. Information can include total assets under management (AUM), fee structures, disciplinary actions received (if any) and any current or potential conflicts of interest. An SEC registered Adviser has a fundamental duty to always and only provide investment advice that is in the best interest of their Clients.