March 30, 2026

SEC Raising the Bar for Performance Fees

Brian Hirshberg Mayer Brown Free Writings + Perspectives + Follow Contact LinkedIn Facebook X Send Embed

On March 27, 2026, the Securities and Exchange Commission (“SEC”) announced its intention to adjust the dollar thresholds used under the Investment Advisers Act of 1940 in determining when a registered investment adviser may charge performance‑based fees.  These fees, which tie adviser compensation to investment gains, are generally prohibited except in respect of “qualified clients” who meet certain net worth or assets‑under-management criteria.  The inflation-linked adjustment is intended to keep the thresholds meaningful in today’s markets.

For investment advisers, the change could alter which clients qualify for performance‑based arrangements, potentially prompting a review of existing contracts and client onboarding processes.  Private funds and other pooled investment vehicles may particularly feel the impact of the change because performance fees often form a significant portion of adviser compensation.  Advisers should begin assessing how these updated thresholds might affect client eligibility, contract terms and disclosure obligations.  Even modest increases could shift who qualifies for performance fees, making early planning and proactive compliance measures essential before the formal order is issued.  Read the SEC’s notice.

[View source.]

Send Print Report

Latest Posts

• CFTC and Major League Baseball Cooperate on Prediction Markets Oversight
• SEC Raising the Bar for Performance Fees
• Skip the Misery: Modernize Fund Rules
• ICI Proposes Subscription Data Framework for Retail Alternatives
• The ATM Survives the Float Drop See more »

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
Attorney Advertising.

©
Mayer Brown Free Writings + Perspectives

Written by:

Mayer Brown Free Writings + Perspectives Contact + Follow Brian Hirshberg + Follow more less

PUBLISH YOUR CONTENT ON JD SUPRA

• ✔ Increased readership
• ✔ Actionable analytics
• ✔ Ongoing writing guidance Join more than 70,000 authors publishing their insights on JD Supra

Start Publishing »

Published In:

Contract Terms + Follow Disclosure Requirements + Follow Fees + Follow Investment Advisers Act of 1940 + Follow Private Funds + Follow Proposed Rules + Follow Registered Investment Advisors + Follow Regulatory Reform + Follow Regulatory Requirements + Follow Securities and Exchange Commission (SEC) + Follow Administrative Agency + Follow General Business + Follow Finance & Banking + Follow Securities + Follow more less

Mayer Brown Free Writings + Perspectives on:

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra: Sign Up Log in ** By using the service, you signify your acceptance of JD Supra's Privacy Policy.* - hide - hide