SEC Issues Update about Upcoming Form ADV Amendments

August 14, 2017

The SEC’s Division of Investment Management issued guidance regarding investment advisers that must file an other-than-annual amendment to Form ADV in the time between October 1 and the adviser’s next annual amendment. The new comprehensive Form ADV amendments have a compliance date of October 1, 2017.  After this date, any adviser filing an initial Form ADV or an amendment to an existing Form ADV must provide responses to the revised form.

In this guidance, the SEC staff noted that it had received questions involving situations in which an adviser determines that it must file an other-than-annual amendment to Form ADV on or after October 1, 2017, but before its next annual amendment to the form would be due, such as when a filer is required to obtain a new private fund identification number or update a Form ADV Part 2A brochure on the Investment Adviser Registration Depository (“IARD”) system.  Other advisers have raised questions about how a filer making an unanticipated other-than-annual amendment before the filer’s next annual amendment is due must respond to new or amended items in Item 5 and the related Schedule D sections that would otherwise be required to be filled out on an annual basis. The advisers noted that, in certain cases, this information may not be available because previously it was not required to be reported on Form ADV. The SEC noted that in particular, some advisers had asked how they should an other¬ than-annual filer respond if the filer’s books and records did not capture the data necessary to respond completely to new Schedule D, Section 5.K.(2), which asks for the amount of regulatory assets under management and borrowings in a filer’s separately managed accounts that correspond to ranges of gross notional exposure as of the end of the filer’s fiscal year?

In the guidance, the SEC staff took a no-action position that in the circumstances described above, an adviser, if it does not have enough data to provide a complete response to a new or amended question in Item 5 or the Schedule D sections related to Item 5 during the period ranging from October 1, 2017 to the filer’s next annual amendment to the form, can wait until its annual update to provide such information.  The staff directed such advisers to respond “0” as a placeholder in order to submit its Form ADV, with a corresponding note in the Miscellaneous section of Schedule D to identify that a placeholder value of “0” was entered.

Click "Information Update for Advisers Filing Certain Form ADV Amendments," IM Infomration Update  (August 2017) to access the guidance.