With March 31 approaching, many investment advisers, their legal representatives and consultants are deep into the Form ADV process. Meeting the deadline, of course is just one challenge. The other is ensuring that the Form is updated to properly disclose changes that took place in an advisers business during the past year or that are expected in the coming year. This information is required for both existing and prospective clients - and you can be sure the SEC will be paying attention.
Investment companies and their advisers now have nine more months to comply with new EDGAR reporting requirements, the SEC said on December 8. It tied the delay to cybersecurity steps that the agency is or will be undertaking.
The Investment Adviser Association has issued a checklist that should make life a little easier for those completing the SECs new and amended items on Form ADV Part 1A. Those items, adopted by the agency in August 2016, address a number of key topics, including reporting on separate accounts and private funds managing multiple entities.
Form ADV is changing - and advisers that do not take the time to learn how to answer the new questions may find themselves scrambling for answers as the October 1 effective date draws near. It may seem far off, but its only a little more than 90 days away. The SECs Division of Investment Management earlier this month issued answers to 23 frequently asked questions to help advisory firms prepare.
Five questions, five relatively clear answers. Thats what the SEC Division of Investment Management provides in its latest guidance on when and how investment advisers may rely on predecessor registrations. Attorneys and consultants providing counsel to investment advisory firms would be wise to use the guidance.
The SEC adopted its final liquidity risk management rule, along with related rules and amendments, on October 13. While the final rule has some significant changes from the proposed version - such as reducing the number of liquidity classifications from six to four - it will still have a significant effect on how mutual funds and other open-end management funds conduct business.
More than a year after proposing them, the SEC on August 25 adopted amendments to Form ADV that will, among other things, require advisers to provide aggregate reporting on separate accounts. The changes will also allow private fund advisers managing multiple entities as a single business to register and report on just one form, a concept known as "umbrella registration." Compliance by advisers is required by October 1, 2017.
Enhanced risk monitoring and regulatory safeguards are fine, but please do it in a way that reduces the regulatory burden on small advisory firms and protects client confidentiality. Also, as long as youre tinkering with Form ADV, please clear up the confusion on the current form regarding custody.
Outsourcing a chief compliance officer may leave both an adviser and the third-party CCO it hired in trouble.