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The Friday List: 10 Most Significant Form ADV Changes

Today, we offer our “Friday List,” an occasional feature summarizing a topic significant to investment management professionals interested in regulatory issues.  Our Friday Lists are an expanded “Our Take” on a particular subject, offering our unique (and sometimes controversial) perspective on an industry topic.

Last August, the SEC again re-vamped Form ADV to add significantly more disclosure.  Firms with a 12/31 fiscal year have until next year to implement the changes.  However, many firms have begun the process as they prepare this year’s annual update.  To assist your planning, here are the 10 most significant Form ADV changes:

 

10 Most Significant Form ADV Changes

 

  1. Separately Managed Accounts.  The new Form ADV requires significant reporting on separately managed account assets including reporting by asset type and related derivative transactions.
  2. Umbrella Registration.  The new filing rules allow affiliated advisers to use a single ADV, but the registrant must complete a detailed schedule for each relying adviser
  3. Social Media.  Every registrant must include websites and social media addresses.
  4. Offices.  An adviser with multiple offices must list its largest 25 offices (used to be 5).
  5. Outside CCO.  If a firm retains a Chief Compliance Officer paid by a third party, the new Form requires the registrant to name the CCO and his/her employer.
  6. Assets Under Management.  The new Form ADV requires more detailed reporting of regulatory assets under management by client type.
  7. Wrap Programs.  Registrants must include more detailed information about the wrap programs in which they participate.
  8. Referral Payments.  The new rules require more disclosure about compensation paid, or received for, referrals including amounts paid by, or to, employees.
  9. Bad Actors.  The bad actor disclosure (DRP) requires information about all relying advisers.
  10. Auditors.  New Form ADV requires information about the auditors to private funds.

 

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