On May 10, pursuant to Section 418 of the Dodd-Frank Act, the SEC proposed amending Rule 205-3 under the Investment Advisers Act, which mandates certain dollar thresholds be met before an investment adviser may charge a client performance fees. The proposed amendment would increase required assets under management and net worth thresholds from $750,000.00 and $1.5 million to $1 million and $2 million, respectively. The net worth test would exclude the value of a client’s principal residence and existing contracts in compliance with the original Rule 205-3 would be grandfathered. Comments must be submitted no later than July 11. SEC Release. SEC Proposed Rule.