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SEC Investment Management Heads Talk Form ADV, Custody, Fiduciary Rule

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While amended Form ADV filings are due on March 31, a Saturday, the Investment Adviser Registration Depository (IARD) “is open for business,” Paul Cellupica, deputy director of the Securities and Exchange Commission’s Division of Investment Management, warned advisors Thursday.

Speaking at the Investment Adviser Association’s compliance conference in Washington, Cellupica said that with the new changes to Forms ADV Part 1A, which took effect on Oct. 1 and require advisors to provide more information on their use of separately managed accounts, branch office operations and social media, he expects IM to be “getting much more robust data on separately managed accounts from advisors to institutional clients and the types of strategies they’re using.”

While the amended Form ADV requirements took effect on Oct. 1, many RIAs whose fiscal year ends with the calendar year will be filling out the new form by March 31.

Form ADV Part 1 is the form that the SEC uses to analyze the industry and that its exam unit, the Office of Compliance Inspections and Examinations, relies on to assess a firm’s risk.

While the commission and staff “has always been interested in data,” Cellupica said, the agency now makes “much greater use of data,” and has “much more robust ways of using data,” noting the agency’s Office of Analytics, which is dedicated to analysis.

Cellupica also said that the IM division is exploring whether “clarification guidance is appropriate” in response to the feedback the agency has gotten on the IM division’s February 2017 no-action letter on advisors’ imputed custody of client assets.

Dahlia Blass, IM’s director, who sat on the panel with Cellupica, told advisors that a fiduciary rulemaking is on the agency’s “very, very short-term agenda,” noting that SEC Chairman Jay Clayton has “made it very clear the principles that have to guide what we put together — maintaining choice for the retail investor and clarity” surrounding “relationships and standards of conduct.”

Blass also reminded attendees that the agency’s spring reg-flex agenda is “coming out shortly.”

Items on the agenda are actions that the agency wants “proposed for adoption by the end of September.”

— Check out SEC Fiduciary Rule Likely to Address Broker, Advisor Titles: Peirce on ThinkAdvisor.


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