SEC Extends Brochure Supplement Compliance Date

December 28, 2010

The SEC has provided a four month extension to the compliance dates by which certain investment advisers must provide clients with brochure supplements, a new disclosure document containing information about the advisory personnel on whom clients rely for investment advice.


The extensions are as follows:

  • Existing investment advisers registered with the SEC as of December 31, 2010, and having a fiscal year ending on December 31, 2010 or any day through April 30, 2011, have until July 31, 2011, to begin delivering brochure supplements to new and prospective clients, and until September 30, 2011, to deliver brochure supplements to existing clients.
  • Existing investment advisers registered with the SEC as of December 31, 2010 and having a fiscal year ending on a day after April 30, 2011 continue to be required to provide brochure supplements to:  (i) new and prospective clients upon filing their annual updating amendment to Form ADV and (ii) existing clients within 60 days of filing the annual updating amendment (This compliance deadline remains unchanged).
  • Newly registered investment advisers filing their applications for registration on any day from January 1, 2011, through April 30, 2011, have until May 1, 2011, to begin delivering brochure supplements to new and prospective clients, and until July 1, 2011, to deliver brochure supplements to existing clients.
  • Newly-registered investment advisers filing applications for registration on any day after April 30, 2011 continue to be required to begin delivering brochure supplements to new and prospective clients upon registering.  (This compliance deadline remains unchanged).

The extension was based upon logistical concerns expressed by the Securities Industry and Financial Markets Association (SIFMA).  In a comment letter to the SEC, SIFMA asserted that its members need additional time to design, test and implement systems and controls that will assure that each client receives an accurate brochure supplement with respect to the supervised person who provides advice to that client.

The SEC noted that the North American Securities Administrators Association has recommended that the state securities authorities provide the same extension for state-registered investment advisers. However, state-registered advisers should contact the states where they are registered to confirm compliance dates.

The SEC is not extending the compliance date for the filing and delivery of the firm brochure required by Part 2A of Form ADV, which is required for newly registering investment advisers beginning on January 1, 2011, and for existing registered advisers when they file their annual updating amendments for fiscal years ending on and after December 31, 2010 (i.e., within 90 days after the end of their fiscal year).

Click here to access the release providing the extensions.


Categories

Investment Advisers, Regulatory