Key takeaways:

• The SEC adopted amendments that adjust for inflation the standards for the qualification of advisory clients and investors as "qualified clients" under Rule 205-3 of the Investment Advisers Act of 1940, the rule that permits a registered investment adviser to charge performance fees to "qualified clients." 
• The SEC also adopted amendments to Rule 205-3 that permit adjustments for inflation in the future and adjust the definition of "qualified client" to exclude the value of the primary residence from the net worth test. 
• The SEC has adopted a transition rule that allows an investment adviser and its clients to maintain existing performance fee arrangements that were permissible when the advisory contracts were entered into.