On July 26, 2021, the Securities and Exchange Commission (“SEC”) announced that 21 investment advisers agreed to settle charges that they failed to file and deliver their CRS Relationship Summary, also known as Form ADV Part 3, to their retail investors. Click here to read the SEC’s full announcement.
The filing and delivery deadline for the new Form CRS/Form ADV Part 3 relationship summary is fast approaching, and many investment adviser firms have not yet prepared the answers for the ADV Part 3 Conversation Starters which are included in the text of a Form ADV Part 3 relationship summary.
The Division of Securities within the Colorado Department of Regulatory Agencies recently provided guidance to state-registered investment adviser firms who received Paycheck Protection Program (“PPP”) loans. Click here to review this guidance.
The U.S. Securities and Exchange Commission (“SEC”) recently provided guidance on the disclosure obligations of an investment adviser firm when receiving a Paycheck Protection Plan (“PPP”) loan guaranteed by the U.S. Small Business Administration in conjunction with the relief afforded from the CARES Act during the COVID-19 pandemic.
With the recent decline in the markets due to COVID-19, it is likely that many investment adviser firms relying upon asset-based fees are also facing a significant decline in the investment advisory fee revenue which can have compliance implications depending upon the circumstances.
On June 5, 2019 the U.S. Securities and Exchange Commission (SEC) voted on and approved package of rulemakings and interpretations, that includes the new Form CRS Relationship Summary, also known as the ADV Part 3. The ADV Part 3 is designed to be a short and accessible disclosure for retail investors that helps them compare information about firms’ investment advisory offerings. To help investment advisers understand what will be required by the Form CRS Relationship Summary/ADV Part 3, RIA Compliance Consultants created a new webpage, Form ADV Part 3 FAQs. The page features 25 questions with detailed answers about what will be required by investment advisers on the Form CRS Relationship Summary/ADV Part 3.
To the extent your investment adviser firm claims that its principal office and place of business is located in Wyoming and therefore eligible for registration with U.S. Securities and Exchange Commission (“SEC”) regardless of the amount of assets under management since the State of Wyoming does not register investment advisers, you should pay close attention to a recent SEC administrative proceeding. The SEC found that the sole investment adviser representative/owner of the investment adviser firm resided in another state where he maintained a home office and operated as his primary base. The investment adviser representative/owner utilized the Wyoming offices on an infrequent basis and did not generally direct, control or coordinate activities from Wyoming. Consequently, the SEC found the investment adviser firm violated Section 203A of the Investment Advisers Act of 1940 by improperly registering with the SEC based upon its misrepresentations that the investment adviser firm’s principal office and place of business was in Wyoming. The SEC ordered the investment adviser to cease and desist, censured the investment adviser firm, fined the investment adviser in the amount of $10,000 and required the investment adviser to establish its principal office and place of business in Wyoming and provide evidence thereof.
On Thursday, January 2, 2014, Final Renewal Statements and reports are available viewing and printing. Registered investment adviser firms should download and review these reports as soon as they become available; the deadline for receipt of Final Renewal Statement payments in January 10, 2014. Additionally, investment advisers firms with a fiscal year end of December 31 are encouraged to begin preparing their required Form ADV annual updating amendments. The Form ADV annual amendment must be submitted through the Web CRD / IARD system 90 days from an investment adviser’s fiscal year. An investment adviser needs to understand that failure to update the Form ADV, as required by the Form ADV General Instructions, is a violation of U.S. Securities and Exchange Commission (“SEC”) rules and similar state rules that could lead to an investment adviser’s registration being revoked. A registered investment adviser with a fiscal year end other than December must make sure to file its annual updating amendment within 90 days of the investment adviser firm’s fiscal year end.
By now, a registered investment adviser with a December fiscal year end should have filed its Form ADV annual updating amendment that is due each year within 90 days of the investment adviser’s fiscal year end. An investment adviser needs to understand that failure to update the Form ADV, as required by the Form ADV General Instructions, is a violation of U.S. Securities and Exchange Commission (“SEC”) rules and similar state rules that could lead to an investment adviser’s registration being revoked. A registered investment adviser with a fiscal year end other than December must make sure to file its annual updating amendment within 90 days of the investment adviser firm’s fiscal year end.
Investment advisers registered with the U.S. Securities and Exchange Commission (“SEC”) or with the state securities regulators must file a Form ADV Annual Amendment each year within 90-days of the investment adviser’s fiscal year end. Many registered investment advisers have a fiscal year end of December, which means that the Form ADV Annual Amendment for fiscal year end 2012 must be filed sometime between now and March 30, 2013.
