The Securities and Exchange Commission adopted amendments Wednesday to update its rule governing advisors operating exclusively through the internet.
SEC Chairman Gary Gensler said Wednesday in a statement that the amendments "modernize a 22-year-old rule to better protect investors in a digital age."
The changes, Gensler relayed, "better reflect what it means in 2024 truly to provide an exclusively internet-based service," and "will better align registration requirements with modern technology and help the Commission in the efficient and effective oversight" of RIAs.
The SEC proposed the rules on July 26. The public comments are available online.
The amendments, according to a fact sheet:
- require an investment advisor relying on the internet adviser exemption to have at all times an operational interactive website through which the adviser provides digital investment advisory services on an ongoing basis to more than one client.
- eliminate the current rule's de minimis exception by requiring an internet investment adviser to provide advice to all of its clients exclusively through an operational interactive website and to make certain corresponding changes to Form ADV.
An exemption written in 2002 "allows gaps in 2024," Gensler added in the statement.
In recent years, Gensler relayed, SEC staff "have observed compliance deficiencies by advisers relying on this exemption."
