The SEC now has a better view of the landscape it will be monitoring.

More than 1,500 advisors to hedge funds and other private funds have registered with the agency since the passage of Dodd-Frank reforms in 2010, the SEC says. The new registrations are giving the commission its first comprehensive look at advisors to these types of funds.

“Prior to the Dodd-Frank Act, regulators only saw a slice of the pie but didn’t know how big the pie even was,” SEC Chairman Mary L. Schapiro said in a statement.  “The law enables regulators to better protect investors by providing a more comprehensive view of who’s out there and what they’re doing.”

Previously, 2,557 private fund advisors had registered with the SEC voluntarily. The new registrations bring the total to 4,061 advisors to one or more private funds. This advisor group now accounts for 37% of the total 11,002 investment advisors now registered with the SEC.

Assets under management at SEC-registered advisors have risen about $5.7 trillion, or 13%, even though the number of advisors fell about 15% -- primarily because the Dodd-Frank Act required midsize advisors to move from federal to state oversight.

The new status also means the registered advisors are held to a fiduciary standard. "Registration of private fund advisors requires these important market participants to comply with the Advisors Act and SEC rules and arms the SEC with the authority to examine their operations,” Norm Champ, director of the SEC’s Division of Investment Management, said in the same statement.  “Advisors are not just required to file a registration form, they also must take steps to ensure they are acting as fiduciaries, including monitoring their activities for conflicts of interest that can harm investors."

They could also be subject to new scrutiny. Earlier this month, the SEC's National Examination Program launched an initiative to conduct focused, risk-based examinations of newly registered private fund advisors over the next two years. 

Midsize Firms Called Out

In addition, the Dodd-Frank Act required midsize advisors to move from federal to state registration by June 28. The SEC says more than 2,300 midsize advisors -- those managing less than $100 million of assets -- have made the transition.

But there appear to be a few laggards. In an effort to finalize the transition, the Commission on Friday issued a notice identifying 293 advisors who may no longer be eligible for registration with the SEC because they manage less than $100 million or have failed to comply with other SEC requirements. The commission says it undertook this effort with extensive coordination and consultation with the state securities authorities.

“Working together throughout the switch, state securities regulators and the SEC have demonstrated the effectiveness and efficiency of government regulation of investment advisors,” A. Heath Abshure, Arkansas Securities commissioner and president of the North American Securities Administrators Association, said in the same statement. “The vast majority of switching advisors have made a smooth transition to state regulation and we are committed to working with those firms that continue to diligently pursue their state investment advisor registrations.”

Advisors identified in the notice have until Dec. 17 to withdraw their SEC registration, or inform the commission staff that they should remain eligible for registration with the SEC. After that date, the commission may issue an order cancelling the registration of advisors who have not filed an amendment, withdrawn from registration, or requested a hearing.

Information about registered advisors is available on the Investment Advisor Public Disclosure website.