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SEC Updates Form ADV FAQs

WHAT HAPPENED?

On June 12, 2017, the SEC released new Form ADV FAQs to provide guidance on recent amendments made to the form. The additions to the FAQs are related to Items 1.I, 1.J, 5.D, 5.K, 7.B and Schedule R. The SEC also provided an update to Item 1.O of the Form ADV.

KEY TAKEAWAYS

The SEC’s updated Form ADV FAQs addressing Items 5.D, 5.K, 7.B and Schedule R provides detailed guidance for specific situations involving:

  • AUM attributable to different clients;
  • The identification of borrowing transactions;
  • Master-feeder arrangements;
  • The anonymity of a private fund clients;
  • Umbrella registration; and
  • Filing as, or for, a relying adviser.

The SEC emphasized the following points in the updated Form ADV FAQs addressing Items 1.I, 1.J and 1.O:

  • An adviser is not required to provide the address of websites or accounts on publicly available social media platforms if they do not control the content or if it is an employee account (regardless of whether the adviser maintains control). An adviser is required to disclose the address if the account is controlled by a parent company and it promotes the adviser’s business.
  • An adviser should only address Item 1.J if its Chief Compliance Officer is employed or compensated by another firm for services provided specifically to the adviser.
  • An adviser must disclose whether it had at least $1 billion in total assets on its balance sheet as of the last day of its fiscal year end. This amount should not include assets managed on behalf of clients or non-proprietary assets.

Please refer to the Form ADV FAQs for the SEC’s responses to these specific situations based on the above topics.

WHAT DOES THIS MEAN FOR ME?

As always, Fairview is available to assist clients with filing Form ADV amendments and will assist clients with making the required updates. Fairview encourages advisers to thoroughly review the SEC’s article and any specific FAQs that might relate to the adviser’s business. If you have any questions related to the SEC new Form ADV FAQs, please do not hesitate to contact Fairview.

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