SEC Proposes changes to Form ADV; Good or Bad? Discuss it at the New York Roundtable Meeting

May 20, 2015 the Securities and Exchange Commission unanimously approved amendments to Form ADV requesting more information about the composition of client portfolios and risk profiles, and advisers use of social media. A 60-day comment period on the changes is now available on the SEC website. Comments from small firms are mixed. Join RND Resources roundtable discussion June 29 2015 in New York.

​In May SEC Chair, Mary Jo White reported that the proposals are part of a series of rule-makings the agency is putting forth to enhance the agency’s monitoring and regulation of the asset management industry, and that the agency also plans to use the additional data to enhance its ability to conduct “more targeted” exams. The information will allow the public and the Commission to better understand the risk profile of individual advisors and the industry. 

However, small investment advisory firms cite that the changes will create more record-keeping, increasing the burden on already stretched to the limit compliance resources. A growing concern for smaller firms is that for every hour spent reviewing and completing compliance initiatives, an hour is lost in growing the practice. In addition, some firms state the proposed information is not meaningful and that Form ADV already contains too much information that prospective clients often don’t read.

Small investment advisory firms cite that the changes will create more record-keeping, increasing the burden on already stretched to the limit compliance resources.

Small RIA Investment Firm, Compliance Officer

A 60-day comment period is now open on where Investment Advisory firms are able to contribute their opinion of the changes. 

The proposed changes to investment adviser registration and reporting include:

Require aggregate information related to assets held and use of borrowings and derivatives in separately managed accounts. (Approximately 73 percent of SEC registered investment advisers manage a wide variety of client assets in separately managed accounts, which generally provide advisory clients with individualized investment advice and direct ownership of the securities and other assets in the account.)

Permit, by rule, certain “umbrella registration” filing arrangements that are currently outlined in staff guidance.

Provide additional information about an adviser’s advisory business and including branch office operations and the use of social media.

Proposed changes to Investment Advisers Act Rules

Proposed amendments to Investment Advisers Act Rule 2042 would require advisers to maintain records of the calculation of performance information that is distributed to any person. Currently, advisers are required to maintain performance information that is distributed to 10 or more persons.

The amendments would also require advisers to maintain communications related to performance or rate of return of accounts and securities recommendations.

RIA Firms needing help with compliance, registration and audit services can contact RND Resources, Inc. for assistance:

Join us in New York on June 29, 2015 for a 2 hour Compliance Roundtable discussion on this topic and others. Free to attend for compliance officers, CEO's, and managing partners. Registration is required. Sign up at our website.

About RND Resources, Inc

Regulatory Compliance and consulting company offering a full suite of services. PCAOB Audits, Risk Assessment, CyberSecurity Consulting, Litigation Support, Assurance Reporting, Registration, Compliance Audits. Serving broker-dealers & RIAs

RND Resources, Inc
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Woodland Hills, California


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