"Adoption of the current reporting requirements is only the first step of what surely will be an ongoing process of emptying the distinction between an exempt reporting advisor and a registered advisor of all meaning," Casey said.
Schapiro said the SEC may re-think the information it seeks after taking a look at the first year's results. Exempt advisors won't be subject to the routine exams registered advisors now face, she said.
Venture Capital
The new definition of venture capital advisors applies to funds that invest mostly in private companies, with minimal leverage, no redemption rights for investors and no more than 20 percent of capital in non-qualifying investments. Funds that started raising money before this year automatically qualify.
At the same time fund advisors are added to the SEC's watch, about 3,200 investment advisers managing $25 million to $100 million will be moved from federal oversight to state-based regulation by June 28, 2012. States will have the option to regulate advisors, leaving the SEC with oversight in those that decline-as New York, Minnesota and Wyoming already have done.