
As of October 1, 2017, firms that make an ADV amendment would notice additional reporting requirements on the Part 1A form (electronic format).
We recommend that firms review the summary of changes and prepare ahead time to comply with additional burdens. ADV 1A Changes include:
Client Reporting Chart:
Additional reporting questions include:
Must file:
Schedule. D (Section 5.K (1)(a) - firms reporting over $10 billion
Must file: Schedule R.
Must include a: Public Company Accounting Oversight Board (PCAOB) number for their auditor. Link to auditor search: https://pcaobus.org/Pages/AuditorSearch.aspx
Regulatory (Grace) period
Item 5.D.1 - Breakdown of clients
Type of Client
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Number of clients
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Fewer than 5 clients
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AUM ($)
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Individuals
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High Net Worth
Individuals
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Banking or thrift institutions
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Investment companies
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Business development companies
|
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Pooled investment vehicles
(other than investment companies and business development companies)
|
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Pension and profit sharing plans
(but not the plan participants or government pension plans)
|
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Charitable organizations
|
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State or municipal government
entities (including government pension plans)
|
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Other investment advisers
|
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Insurance companies
|
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Sovereign wealth funds and
foreign official institutions
|
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Corporations or other businesses
not listed above
|
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Other:
|
Additional reporting questions include:
Item 1.F.(5) – What is the total number
of offices?
Item 5.C.(1) – What is the total number
of clients?
Item 5.I.(1) – Does the firm
participate in a wrap fee program?
Item 5.J.(2) - Does the firm report
client assets that are computed using a different method?
Item 5(K) – Does the firm have assets under
management for separately managed accounts?
Item 8.B(2) – Does the firm recommend
the purchase of securities to advisory clients?
Item 8.H(1) – Does the firm compensate
any non-employee for client referrals?
Item 8.H(2) – Does the firm compensate
any employee for client referrals?
Item 8.I – Does the firm compensate any
person for client referrals?
Firms
(with separately managed accounts in Item 5.D.1):
Must file:
Schedule. D (Section 5.K (1)(a) - firms reporting over $10 billion
Schedule. D (Section 5.K (1)(b) - firms
reporting under $10 billion
(1)(B) example shown below
(1)(B) example shown below
Asset Type
|
End of year (%)
|
Exchange-Traded Equity Securities
|
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Non-Exchange-Traded Equity Securities
|
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U.S. Government/Agency Bonds
|
|
U.S. State and Local Bonds
|
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Sovereign Bonds
|
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Investment Grade Corporate Bonds
|
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Non-Investment Grade Corporate Bonds
|
|
Derivatives
|
|
Securities Issued by Registered Investment Companies or Business
Development Companies
|
|
Securities Issued by Pooled Investment Vehicles (other than
Registered Investment Companies or Business Development Companies)
|
|
Cash and Cash Equivalents
|
|
Other
|
SEC-Umbrella
filling firms with Relying Advisors:
Must file: Schedule R.
Firms who report Private Funds:
Must include a: Public Company Accounting Oversight Board (PCAOB) number for their auditor. Link to auditor search: https://pcaobus.org/Pages/AuditorSearch.aspx
Summary of all Part 1A changes: https://www.sec.gov/about/forms/formadv-part1a.pdf
Regulatory (Grace) period
Some advisors may experience additional
headaches in compiling reporting data, but there is some relief---a regulatory
grace period through the next ADV amendment cycle.
The SEC will not recommend
enforcement actions for firms that fail to report assets of separately managed
accounts (Schedule D, Section 5.K.(2)) prior to next annual amendment cycle
(e.g. “other than annual amendment filing’s).
Excerpt
from IM Guidance: “if a filer does not have enough data to provide a
complete response to a new or amended question in Item 5 or the Schedule D
sections related to Item 5 during the period ranging from October 1, 2017 to
the filer’s next annual amendment to the form, the staff would not recommend
enforcement action to the Commission under section 207 of the Investment
Advisers Act of 1940 if the filer responds “0” as a placeholder in order to
submit its Form ADV, with a corresponding note in the Miscellaneous section of
Schedule D to identify that a placeholder value of “0” was entered”.
https://www.sec.gov/divisions/investment/imannouncements/im-info-2017-06.pdf
https://www.sec.gov/divisions/investment/imannouncements/im-info-2017-06.pdf
Compliance and Business Management
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consortium of compliance services including: RIA Consults-Roberson Consults
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Impact
FIN Missions (FINmissions.com) provides business support group
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S. Africa, Thailand, and India.
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