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News February 7, 2005 Issue

A Bit More About Amending Your ADV to Reflect Your Code of Ethics

Last week, IM Insight reminded readers to update their Form ADVs to describe their new (or amended) codes of ethics, as required by Rule 204A-1. The article indicated that you could wait to do that until your regularly-scheduled Form ADV amendments, which are due 90 days after your fiscal year end.

Weíve since learned that the better advice would have been: Get it in there promptly, if you havenít done so already. But thereís no need to panic.

As you may know, the SECís code of ethics rules amended Item 9 of Part II to add the following new sentence: "Describe, on Schedule F, your code of ethics, and state that you will provide a copy of your code of ethics to any client or prospective client upon request." That change, like all other changes in the rule, had a "compliance date" of February 1.

February 1 came and went, with neither hide nor hair of an updated version of Part II including that new item. (Turns out the SEC staff ran into some unavoidable technical difficulties in updating the Part II, but is working on putting the amended form together. The updated version of the form should be up on the SECís website very soon).

The good news is that the eminently reasonable message IM Insight has gotten on the question of when, exactly, an adviser has to add the code of ethics disclosure to the Form ADV Part II is as follows: "It was supposed to be in on February 1. However, if you havenít done it already, just do it as soon as you can."

Of course, Form ADV Part IIs arenít physically filed with the SEC. Just add the description of your code of ethics to the version of the brochure "deemed filed" but stored in your files, and use the updated version of the form going forward.