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Regulation and Compliance > State Regulation > NASAA

The State Perspective: Massey on the New Form ADV Part II

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The new Form ADV Part 2 becomes effective this month and investment advisers and securities regulators alike are busy preparing for the use of this improved disclosure document.

Adopted by the Securities and Exchange Commission on July 28, 2010, the new Part 2 requires registered investment advisers to provide new and prospective clients with a brochure and brochure supplements written in plain English. The amendments to Part 2 of Form ADV become effective on October 12, 2010.

NASAA has recommended that states that have adopted the Form ADV for use in the investment adviser registration process and for disclosure purposes should begin using the new Part 2 according to the following schedule:

  • Between October 12, 2010 and December 31, 2010, new applicants filing Form ADV and currently licensed investment advisers filing amendments to their Part II of Form ADV may use either the old Part II or the new Part 2.
  • After January 1, 2011, all new investment advisers registering for the first time in any state or for initial registration in a new state should submit the new Part 2 through the IARD to the states in which registration is being sought.  Those already registered will need to incorporate the new Part 2 with their next filing of an amendment to Form ADV or their annual updating amendment to Form ADV, whichever occurs first. Each investment adviser with a fiscal year end of December 31, 2010, who hasn’t already filed an updated Part 2, must file an annual updating amendment in IARD with the new Part 2 brochures no later than March 31, 2011.

Blank templates for the new Form ADV Part 2 will be available after October 12 on the NASAA Form ADV webpage for free download and use by investment advisers.

When I assumed the leadership of NASAA last month, I pledged to enhance communication between NASAA members and the regulated community and to remain sensitive to the cost and complexity of regulatory compliance. That’s why I am very pleased by two recent developments at NASAA.

First, we have developed a new tool to provide the information to those investment advisers preparing to switch to state regulation as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Our online IA Switch Resource Center contains background information, answers to frequently asked questions and a directory of state contacts. Users of the site also are able to send their questions to NASAA. These questions, in turn, will be used to update the site’s FAQ to make it more responsive to your concerns.

Second, NASAA again has been able to waive the initial set-up and annual system fees paid by investment adviser firms and their representatives to maintain the Investment Adviser Registration Depository (IARD) system.

My door is open and I look forward to hearing from you in the year ahead to identify areas of common interest and opportunities for improvement. We may not agree on every issue, but we have to preserve effective lines of communication so that we can discuss our differences in a respectful and productive manner.


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