SEC Amends Form ADV and Investment Adviser Recordkeeping Rules

September 15, 2016

The U.S. Securities and Exchange Commission (SEC) recently adopted amendments to Form ADV and to Rule 204-2 (Recordkeeping Rule), as well as technical amendments to other rules under the Investment Advisers Act of 1940 (Advisers Act) (collectively, Final Rule). The amendments were proposed on May 20, 2015 with a comment period ending August 11, 2015. The Final Rule will become effective on October 31, 2016, with a compliance date of October 1, 2017 for the amendments to Form ADV and the Advisers Act rules.

As a result of the Final Rule, advisers registering on Form ADV will be required to report additional information – with a focus on separately managed accounts (SMAs) – which will be made available to the general public. In addition, multiple private fund advisers operating as a single advisory business will be able to register using a single Form ADV. Finally, advisers will be required to comply with certain recordkeeping requirements related to written communications of performance or securities recommendations to any person. The Final Rule is designed to: fill what the SEC believes are certain data gaps regarding SMAs; assist the SEC in carrying out its risk-based examination program; and further other monitoring activities.

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