(Anna Felipe – 8/2017) The Securities and Exchange Commission (the “SEC”) adopted rules, to improve the quality of information that clients and the SEC receive and to enhance Form ADV disclosure requirements. Investment advisers will need to comply with the new Form ADV Amendments on October 1, 2017. However, for majority of advisers with a December 31 fiscal year end, this means Form ADV compliance with respect to October 1, 2017 amendments is no later than the annual Form ADV filing in March 2018.
Separately Managed Account (SMA) reporting
One of the most noteworthy requirements of the Amendments is the increased disclosure requirements with regards to Separately Managed Accounts (SMA). Part of the amendment require the reporting of the approximate percentage of their SMA assets invested in the appropriate asset categories (i.e. ETF, non-exchange traded equity securities, U.S. government bond, corporate, derivative, etc.) and the reporting of information on borrowing and derivatives in Separately Managed Accounts.
Under certain preconditions, the amendments also permitted advisers to file a single Form ADV on behalf of itself and other investment advisers, provided that the advisers are controlled by one another or are under common control of a parent entity and conduct a single advisory business involving private funds.
Social Media Platforms & Adviser Office Reporting
Instructions to Form ADV have also been revised to require disclosure of all internet websites of the adviser and all publicly available social media platforms where the adviser has a presence and controls the content; including social media platforms targeted towards non-U.S. clients. The Form ADV now also requires advisers to provide the number of offices as well as information about their 25 largest offices. Finally, the amendments require advisers to maintain additional written materials related to calculation and distribution of performance information.
These changes are the biggest revision to Form ADV since 2010 and are aimed in part to help SEC better target examinations. For more details read the SEC rule release IA 4509.