SEC Form ADV Amendments and Investment Adviser Recordkeeping Rules: Compliance Deadline Quickly Approaching

September 01, 2017
The Investment Lawyer

The US Securities and Exchange Commission (SEC) 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) on August 25, 2016. 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.

In preparing for the October 1, 2017 compliance date, advisers may need to begin collecting and retaining information now and should consider whether any changes should be made to their policies and procedures related to recordkeeping for written communications and Form ADV reporting, particularly for SMAs. This article focuses on record retention efforts that may need to take place in anticipation of the compliance date as well as SMA reporting.

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