The North American Securities Administrators Association (NASAA) is objecting to the Securities and Exchange Commission’s (SEC) upcoming staff recommendation to adopt a version of Form ADV Part 2 to be used by investment advisors registered only with the SEC, and not those that are registered with the states. The proposal is slated to be considered at the SEC’s July 21 open meeting.
Denise Voigt Crawford, Texas Securities Commissioner and president of NASAA, told Investment Advisor in a July 14 interview that NASAA was informed “late last week” that the SEC’s Division of Investment Management would recommend to the Commission that there be a separate Form ADV Part 2 for SEC-registered advisors. “This is totally contrary to what we [state regulators and the SEC] had agreed upon,” Crawford told IA. “It will be very difficult for people in the industry to juggle two Form ADVs.” It’s unclear whether the “SEC Commissioners realize that this change has been made,” Crawford adds. “If this was a situation where there was a miscommunication at the Commission, we want that to be remedied.”
In a July 13 letter to SEC Chairman Mary Schapiro, Crawford writes that having a separate Form ADV Part 2 for SEC-registered advisors “will adversely impact investors and investment advisers, and undermines regulatory cooperation.” For these reasons, she continued, “we ask that the SEC reject this recommendation and instruct the staff to move forward with the Form ADV Part 2 as a joint form for use by state- and federal- regulated advisers as proposed by the Commission in 2000 and reproposed in 2008.”
Crawford also points out the fact that under the Dodd-Frank regulatory reform bill, which is expected to be passed by the Senate on Thursday, July 15, advisors with up to $100 million in assets under management (AUM) would shift from SEC to state regulation.