U.S. Securities and Exchange Commission acting chairman asks staff to reassess the SEC–state split for mid-sized advisers and securities law preemption

In remarks to the Annual Conference on Federal and State Securities Cooperation, U.S. Securities and Exchange Commission Acting Chairman Mark T. Uyeda called for a re-evaluation of the federal–state regulatory divide in two areas. He said SEC staff has been asked to assess whether the current allocation of oversight for mid-sized investment advisers remains appropriate and invited input on whether federal preemption of state registration or qualification requirements for securities transactions is properly calibrated. On investment advisers, Uyeda pointed to the Dodd-Frank framework under which advisers with USD 25 million to USD 100 million in assets under management (AUM) are generally overseen by states and advisers above USD 100 million by the SEC, noting the Commission also has authority to raise the USD 100 million threshold by rule. He cited growth since 2012, including a roughly 45 percent increase in registered investment advisers to 15,411, with 8,956 advisers between USD 100 million and USD 1 billion in AUM and 4,756 advisers above USD 1 billion, and argued the split may have become unbalanced. On preemption, he highlighted practical inconsistencies across registered offerings, resales relying on Rule 144, and exempt offerings such as Rule 506, Regulation A Tier 2, and Regulation Crowdfunding, including potential impacts on secondary liquidity when state requirements apply across multiple jurisdictions, and suggested options short of full preemption such as limiting state qualification to a single state. He encouraged state regulators to engage with the SEC Division of Investment Management on the adviser split review and invited public and state input on potential adjustments to the scope and degree of federal preemption.