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August 12, 2015 at 07:59 AM
The Investment Adviser Association in a comment letter urged the Securities and Exchange Commission on Tuesday to focus a “particularly keen eye” on the disproportionate costs that would be imposed on smaller advisors if the agency moves ahead with its plan to require advisors to provide more data on separately managed accounts on their Form ADV.
The SEC proposed in late May proposed amendments to Form ADV requiring advisors to not only provide more information about their use of derivatives in separately managed accounts, but also about their branch office operations and their use of social media.
On that point, Tom Giachetti, chair of Stark & Stark’s Securities Practice Group, wrote recently in Investment Advisor that while Form ADV Part 1 Item 1.I currently requires an advisory firm to identify its website, the proposed amendment would require an advisor to include any social media platforms it uses.
“This will not only make it easier for SEC examiners to locate and scrutinize online RIA advertisements, but could have a profound effect upon advisory firms whose representatives are using social media to advertise on behalf of the RIA without properly notifying management.”
The comment period on the proposal, designed to enhance risk monitoring and regulatory safeguards for the asset management industry, expired Tuesday.
Besides suggesting that the SEC amend questions on custody of assets in Form ADV, which IAA argues “are needlessly confusing for advisors and could be clarified to generate more accurate, consistent responses from the industry,” IAA told the agency to target its approach requiring advisors to report additional data about their business and their clients’ investments, particularly in client accounts that are managed individually–which the SEC refers to as separately managed accounts.
