The American Shetland Pony is a breed determined by bloodlines, not simply size. Unless he or she also carries ASPC papers, a mini that goes oversize becomes a grade pony. Since AMHR no longer allows hardshipping, even those between 34-38 inches are grade unless they have papers. (AMHA for now still allows hardshipping, so under 34 inches can be registered as a mini with them.)
The height limit for AMHR is 38 inches measured at the last mane hair. A horse with prominent withers can measure 38 inches at the last mane hair AND 40 inches at the top of the withers. This is the case with my B-sized AMHR-registered mini. He is most likely Shetland by breeding, but he was rescued without papers, so I hardshipped him into AMHR (when they still allowed that).
ASPC Shetlands that mature 38 inches and under have become extremely popular double-registered with AMHR. They do extremely well in the breed show ring with their refinement, long legs and beautiful movement.
Your mare is very pretty and appears to likely be of Shetland descent, in type if not by papers.