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SEC Says that RIAs and BDs Can Only Have One Form CRS


The staffs of two SEC divisions published Form CRS FAQs that apprised advisers and broker-dealers that they can only use one Form CRS even if the firm offers multiple products and services.  The newly adopted Customer Relationship Summary or Form CRS will require RIAs and BDs to provide retail customers with a description of the relationship including fees, services, standard of conduct, and firm information.  The FAQs declare that a firm cannot deliver a separate CRS for each service but must prepare a comprehensive Form including all services.  However, a dual registrant can prepare a separate Form CRS for its advisory and broker-dealer services.  The FAQs also clarify that private fund sponsors need not deliver a Form CRS to retail investors in the funds.  Also notable is that delivery of the Form CRS can be included with other document delivery so long as the Form CRS is “the first among any documents delivered…at that time” or are “presented prominently in the electronic medium.” The Divisions of Investment Management and Trading and Markets jointly issued the FAQs. 

Time to start drafting.  Call your lawyers and compli-pros to craft the Form CRS before the experts fill up their dance cards.  After all, there are approximately 13,000 registered investment advisers and over 3,000 broker-dealers out there, most of whom have to prepare a Form CRS.