SEC Adopts Amendments to Form ADV

August 25, 2016

The SEC adopted amendments to Form ADV designed to provide additional information regarding advisers, including information about their separately managed account business, incorporate a method for private fund adviser entities operating a single advisory business to register using a single Form ADV, and make clarifying, technical and other amendments to certain Form ADV items and instructions. The SEC also adopted amendments to the Advisers Act books and records rule and technical amendments to several Advisers Act rules to remove transition provisions that are no longer necessary.

 

Certain amendments to Form ADV relate to separately managed accounts, requiring advisers to provide certain aggregate information about separately managed accounts that they advise. Other amendments to Form ADV are designed to improve the depth and quality of information that the SEC collects on investment advisers, facilitate its risk monitoring initiatives and assist its staff in its risk-based examination program.

The SEC also adopted amendments to Part 1A designed to provide a more efficient method for the registration on one Form ADV of multiple private fund adviser entities operating a single advisory business (“umbrella registration”). The amendments add a new schedule to Part 1A – Schedule R – that must be filed for each relying adviser. Schedule R requires identifying information, basis for SEC registration, and ownership information about each relying adviser, some of which was already filed by an adviser relying on the staff guidance. This new schedule consolidates in one location information for each relying adviser.

In addition, the SEC adopted amendments to the books and records rule, Rule 204-2, to require advisers to make and keep supporting documentation that demonstrates performance calculations or rates of return in any written communications that the adviser circulates or distributes, directly or indirectly, to any person. Advisers also will be required to maintain originals of all written communications received and copies of written communications sent by them related to the performance or rate of return of any or all managed accounts or securities recommendations. 

With respect to compliance dates, any adviser filing an initial Form ADV or an amendment to an existing Form ADV on or after October 1, 2017 will be required to provide responses to the amended Form ADV. The books and records rule amendments will apply to communications circulated or distributed after October 1, 2017. 

Click https://www.sec.gov/rules/final/2016/ia-4509.pdf to access the release adopting the amendments.