Key Takeaways: The SEC has increased the qualified client thresholds under Rule 205-3 effective June 29, 2026, raising the assets-under-management test to $1.4 million and the net worth test to $2.7 million. The changes reflect the SEC’s required five-year inflation adjustment under the Advisers Act. The updated thresholds affect when SEC-registered (and certain state-registered/exempt) investment advisers may charge performance-based compensation, including incentive fees, performance allocations and carried interest. New subscriptions, advisory contracts and transfers after June 29, 2026, must satisfy the revised standards. Advisers should update subscription documents, managed account agreements, compliance policies and marketing materials before the effective date. Firms with pending closings or investor admissions should also assess whether transaction timing affects qualified client eligibility. The SEC has issued a final order

Update: The California Department of Financial Protection and Innovation (DFPI) has announced a suspension of the requirement for covered entities to submit registrations or file reports under the Fair Investment Practices by Venture Capital Companies Law (FIPVCC). Venture capital companies are no longer required to make filings by the April 1, 2026, deadline. Instead, DFPI announced that it will initiate a formal rulemaking process surrounding the law. Before formally drafting rules, DFPI intends to seek input from venture capital companies, industry associations, founders, investors and other stakeholders. Once the formal rulemaking process starts, it must be completed within a year. At a minimum, this means the registration and filing process is being postponed by at least a few months (and more likely over