Alert January 04, 2011

SEC Provides Extension on Compliance Dates for Delivery of Form ADV Brochure Supplement

The SEC issued a release extending by four months the compliance date for delivering the new brochure supplement (Part 2B of Form ADV), which was adopted as part of the SEC’s general overhaul of Part 2 of Form ADV that also replaced Part 2’s check-the-box, fill-in-the-blank approach with a narrative brochure (Part 2A of Form ADV) and added a requirement that the brochure be filed electronically with the SEC (as discussed in more detail in the August 3, 2010 Alert).  The brochure supplement contains information about certain advisory personnel involved with a client account that must be provided to the client (which, in the case of a fund client, would be the fund itself) before those personnel begin providing advisory services to the client.  (The brochure supplement is distinct from the brochure, which provides a client or prospective client with information about the advisory firm as a whole). 

Prior to the current compliance date extension, (1) an existing investment adviser registrant would be required to begin providing brochure supplements to new and prospective clients upon filing the adviser’s annual updating amendment to Form ADV for fiscal years ending December 31, 2010 and later, and to existing clients within 60 days of filing the annual updating amendment; and (2) an adviser applying for registration on or after January 1, 2011 would be required to begin providing brochure supplements to clients upon registering.  The extension makes the following changes to the foregoing compliance requirements (leaving the compliance dates related to the Part 2A brochure unaffected):

Investment Advisers Registered as of December 31, 2010.  An adviser with a fiscal year ending December 31, 2010 through April 30, 2011 has (a) until July 31, 2011 to begin delivering brochure supplements to new and prospective clients and (b) until September 30, 2011 to deliver brochure supplements to existing clients.  (An adviser whose next fiscal year ends after April 30, 2011 is subject to the compliance date requirements for brochure supplements as originally adopted.)

Investment Advisers Registering on or after January 1, 2011.  An investment adviser filing an application for registration from January 1, 2011 through April 30, 2011, has (a) until May 1, 2011 to begin delivering brochure supplements to new and prospective clients and (b) until July 1, 2011 to deliver brochure supplements to existing clients.  (An investment adviser filing an application for registration after April 30, 2011 is subject to the compliance date requirements for brochure supplements as originally adopted.)