In July 2010, the Securities and Exchange Commission (“SEC”) adopted changes to Form ADV, Part 2, which became effective October 12, 2010. This section is commonly referred to as the “brochure” and explains an investment adviser’s qualifications, investment strategies, and business practices to investors. Essentially, the amendment requires registered investment advisors to now make disclosures in plain English, as opposed to a fill-in-the blank and check box form. To learn more about the substantive changes of the amendment, please visit our previous securities and investment blog regarding these changes.
The Old Deadlines
When the amendments were adopted, the SEC established two separate deadlines for delivering brochure supplements for existing investment adviser registrants (“Existing Registrants”). Originally, Existing Registrants were required to provide brochure supplements to new and prospective clients upon filing their annual updating amendment to Form ADV for the fiscal year end 2010, and to existing clients within 60 days of filing the annual updating amendment. Noting that most Existing Registrants have a fiscal year end on December 31, existing registrants would be required to deliver their first brochure supplements no later than March 31 and to deliver to existing clients no later than May 31.
New investment adviser registrants (“New Registrants”) applying for registration on or after January 1, 2011 would be required to provide brochure supplements to clients upon registration.
The New Deadlines
However, based on concerns expressed about the deadlines, on December 28, 2010, the SEC extended compliance dates for portions of Form ADV, Part 2. Specifically, the compliance date for Form ADV, Part 2B and the provisions of Rule 204-3 concerning the delivery of brochure supplements is extended approximately four months. Note the extension does not apply to the annual updating amendment deadline.
For Existing Registrants with a fiscal year ending on December 31, 2010 through April 30, 2011, delivery of the brochure supplements to new and prospective clients must occur by July 31, 2011. Delivery to existing clients has been extended to September 30, 2011.
For New Registrants filing applications between January 1, 2011 and April 30, 2011, delivery to new and prospective clients must occur by May 1, 2011. New Registrants have until July 1, 2011 to deliver brochure supplements to existing clients.
| Important Dates | |
| March 31, 2011 | Filing deadline for all applicants for Form ADV annual updating amendment, including the new Part 2A brochure |
| May 1, 2011 | Delivery deadline for new registrants to deliver brochure supplements [Form ADV, Part 2B] to new and prospective clients |
| July 1, 2011 | Delivery deadline for new registrants to deliver brochure supplements to existing clients |
| July 31, 2011 | Delivery deadline for existing registrants to deliver brochure supplements [Form ADV, Part 2B] to new and prospective clients |
| Sept. 30, 2011 | Delivery deadline for existing registrants to deliver brochure supplements to existing clients |
The North American Securities Administrators Association has recommended that state securities authorities provide the same extension for state-registered investment advisors. However, state-registered advisers should contact the states where they are registered to confirm compliance dates. The attorneys at Cosgrove Law, LLC have experience with investment adviser registration matters, including annual and as-needed Form ADV updates and reviews. If you or your company has concerns regarding these amendments to ADV Part 2, please do not hesitate to contact us.
No comments:
Post a Comment