A person or firm that does not meet any of the criteria in Section 203A of the Advisers Act or Rule 203A-2 thereunder is prohibited from registering with the Commission.

Only the following types of advisers are permitted to register with the Commission (and therefore must register with the Commission, unless exempt under Section 203(b)):

• advisers that have "assets under management" of $25 million or more;

• advisers to registered investment companies;

• advisers that have their principal office and place of business in a state that has not enacted an investment adviser statute (currently, only Wyoming), or that have their principal office and place of business outside the United States; or

• advisers that are exempted from the prohibition by Commission rule or order. The Commission has adopted a rule exempting five categories of investment advisers:

• nationally recognized statistical rating organizations ("NRSROs") (Rule 203A-2(a));

• pension consultants that provide investment advice with respect to $50 million or more of plan assets (Rule 203A-2(b));

• investment advisers sharing the same principal office and place of business with an affiliated investment adviser that is registered with the Commission (Rule 203A-2(c));

• newly-formed investment advisers that have a reasonable expectation of being eligible for Commission registration within 120 days of formation (Rule 203A-2(d)); and

• investment advisers that would otherwise be required to register as investment advisers with the securities authorities of 30 or more states (Rule 203A-2(e)).

Advisers are required to report their eligibility for Commission registration on Schedule I to Form ADV upon initial registration. Additionally, advisers are required to report their continuing eligibility for Commission registration annually by amending Schedule I to Form ADV within ninety days of the end of their fiscal year.