Monday, August 29, 2016
SEC AMENDS FORM ADV
Last week the U.S. Securities and Exchange Commission announced the adoption of amendments to Form ADV, the investment adviser registration and reporting form. The highlights of those amendments are as follows:
- The incorporation of umbrella registration, which allows adviser entities operating a single advisory business to register with the SEC using a single Form ADV.
- Additional reporting requirements in connection with an adviser’s separately managed accounts, specifically information relating to the use of borrowings and derivatives.
- Advisers must provide a list of any public-facing social media platforms they use, such as Twitter, Facebook or LinkedIn.
- Advisers will be required to disclose if their chief compliance officer is compensated or employed by any person other than the adviser.
The SEC also adopted amendments to the books and records rule, Rule 204-2, which relate to making and keeping records related to performance calculations and rates of return communicated in writing by an adviser. Books and records for any communication circulated on or after October 1, 2017, must be in compliance with the revised rule.
The amendments to Form ADV will not take effect until October 1, 2017. While there is a long lead time, advisers should consider beginning to work now to ensure compliance by next year. Advisers are urged to go ahead and consider updating their compliance policies and procedures to reflect the revised rules during their next annual review.