According to the proposed new Form ADV Part 2 rule offered earlier this year for consideration by the U.S. Securities and Exchange Commission (“SEC”), registered investment advisors will be required to insert a Material Changes page at the beginning of their brochures. Material changes could be summarized on the Cover Page of the brochure or could be included on a separate Material Changes page which would appear immediately after the Cover Page and before the Table of Contents. A third alternative will be to include a separate communication that would accompany the brochure.
Category Archives: Form ADV
The new Form ADV Part 2 proposal outlines numerous changes regarding additional and more detailed disclosures of a registered investment advisor’s services, conflicts of interests and material arrangements. However, the most significant new requirement under the proposed rule may be an administrative one.
Understanding the SEC’s Proposed New Form ADV Part 2 – Complimentary Webinar
September 08, 2008
Join us for a webinar, Understanding the SEC’s Proposed New Form ADV Part 2, on Thursday, September 25. Reserve your complimentary webinar seat now by clicking here.
Are You Ready for the Proposed New Form ADV Part 2?
September 08, 2008
As required under SEC Rule 204-3 under the Investment Advisers Act of 1940 and similar state securities rules, a registered investment advisor is required to provide all clients with a disclosure brochure. In order to comply with this rule, registered investment advisors may provide a copy of their Form ADV Part II or may provide a separate disclosure brochure that contains the same information required in the Form ADV Part II. The current Form ADV Part II is constructed in a check-the-box format that requires registered investment advisors to answer all questions and provide additional information on the Schedule F.
Summary of SEC’s Newly Proposed Form ADV Part 2
March 09, 2008
RIA Compliance Consultants, Inc. intends to submit formal comments to the U.S. Securities and Exchange Commission (“SEC”) regarding proposed changes to Part 2 of Form ADV. The “re-proposed” changes were announced earlier this month after an initial attempt to change Part 2 of Form ADV was made in 2000. RIA Compliance Consultants is encouraging registered investment advisers to read the proposed rule release and provide their own comments. Comments must be received by the SEC on or before May 16, 2008. The proposed rule release can be viewed on the SEC’s website at http://www.sec.gov/rules/proposed.shtml. Clients of RIA Compliance Consultants can also forward their comments to us for inclusion into our comment letter. Comments should be sent to RIA Compliance Consultants by April 30, 2008.
The U.S. Securities and Exchange Commission (“SEC”) published on its website today the actual text of the proposed amendments to the Form ADV Part 2 in SEC Release No. IA-2711. The proposed amendments to the Form ADV Part 2 and related SEC rules will be open for comment until May 16, 2008. Upon completing its analysis of this 169 page release, RIA Compliance Consultants will share its commentary with our readers of this blog.
Form ADV Part 1 Annual Amendments for Fiscal Year Ended December 2007
February 29, 2008
This is a reminder to all registered investment advisors with a fiscal year end of December 2007. Your Form ADV Part 1 Annual Amendment must be submitted through Web CRD/IARD system no later than ninety (90) days after your registered investment advisor firm’s fiscal year end. Because March 30th falls on a Sunday this year, in order to avoid any potential late filings, the Annual Amendment should be submitted on Friday, March 28.
In January of this year, the SEC entered bar and cease and desist orders against a two member registered investment advisor firm. The firm was owned by a husband and wife with the wife serving strictly in an administrative capacity. The law judge in the case found that the registered investment advisor had willfully violated the Investment Advisers Act of 1940 because it falsely represented to the SEC that it had assets under management (AUM) exceeding $25 million in order to remain eligible for SEC registration. The inflated AUM numbers were reported on several Form ADV Part 1 amendments from 1996 through 2000. The SEC terminated the firm’s registration in 2002. However, the firm continued to hold itself out to the public as an investment advisor and reported its AUM numbers through several database services. The reporting of those numbers were also found to be intentionally inflated and therefore misleading. Further, the firm was not able to provide documentation substantiating its AUM and performance numbers. The firm claimed all paperwork and client files were lost in a fire and then claimed the paperwork was lost in flood. To read the entire order click here.
SEC Considering a New Form ADV Part 2 at Its February 13th Meeting
February 07, 2008
The U.S. Securities and Exchange Commission (“SEC”) announced today that the SEC Commissioners will consider at the SEC’s open meeting on February 13, 2008 whether to propose amendments to the Part 2 of the Form ADV under the Investment Advisers Act of 1940.
Form ADV Deficiencies Most Commonly Cited During State Examinations
January 07, 2008
According to a study conducted by the North American Securities Administrators Association (NASAA) analyzing state-registered investment adviser regulatory examinations, the top deficiencies cited during those examinations were (1) inconsistencies between Form ADV Part 1 and Form ADV Part II; (2) failing to amend Form ADV in a timely manner; and (3) failing to provide or offer a copy of the disclosure document to clients annually. This information was released by NASAA on October 15, 2007 after the completion of their study of 418 examinations conducted from January 1, 2007 through May 31, 2007. The examinations were conducted by 43 state and provincial securities examiners.
