Due Diligence

SEC Votes To Adopt Changes to Form ADV Part 2

The SEC voted unanimously today to adopt change to the investment adviser disclosure document, Form ADV Part 2, provided to clients and prospective clients. Form ADV Part 2 describes an investment adviser’s qualifications, investment strategies, and business practices. The new rules and forms will be effective 60 days after publication in the Federal Register. Publication of the new form will be postponed for 5 days so that SEC staff can work with with the states to accommodate state-specific changes to the form, so that the forms are uniform.

From the release:

The amendments adopted by the SEC will:

--Improve the format and update the requirements of the brochure.

--Expand the content to better include details most relevant to the clients of investment advisers.

--Require brochure “supplements” to be delivered to new and prospective clients to give resume-like information about the individuals at an investment advisory firm who will provide services to the clients.

--Ensure investors have easy access to the brochures as investment advisers are required to file them electronically for posting on the SEC’s website.

Many state-registered investment advisers also currently file Form ADV with their regulators. The Commission authorized the staff to delay publication of the revised Form ADV, Part 2 for five business days in order to work with the states to accommodate technical, state-specific changes to the items and instructions of the form. This process would enable publication of Form ADV, Part 2 as a uniform SEC-state form.

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