Effective September 19, 2011, the Securities and Exchange Commission (the “SEC”) has increased the client net worth and assets under management requirements applicable to U.S.-registered investment advisers that rely on Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”) to charge performance fees. The changes will impact the types of client accounts and private fund investor accounts that may be subject to performance fees charged by such advisers. In addition, U.S.-registered advisers, as well as those who may soon be required to register with the SEC, should be on the lookout for further changes to the performance fee requirements under the Advisers Act.