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Envestnet, CSS Launch Reg BI Tool for RIAs and BDs

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Envestnet joined forces with Compliance Solutions Strategies to offer RIAs and broker-dealers a simplified solution to meet the Form CRS filing requirements adopted by the Securities and Exchange Commission ahead of the June 30 deadline.

The web-based tool is a “comprehensive, fully customizable” software solution for Envestnet’s RIA and BD clients, the companies said.

CSS’ Form CRS Automator software provides regulated firms the ability to produce the required Customer Relationship Summary form quickly and efficiently. It is available on the CSS website for $1,895.

On June 5, 2019, the SEC passed by a 3-1 vote its controversial Regulation Best Interest, which SEC Chairman Jay Clayton said would “substantially enhance the broker-dealer standard of conduct beyond existing suitability obligations.”

The agency also passed by a 3-1 vote the three other prongs of the advice-standards package: The Form CRS Relationship Summary, the Standard of Conduct for Investment Advisers and a new Interpretation of “Solely Incidental.”

As a result, all RIAs and BDs will be required to provide a Form CRS — a two-page document, or a four-page document for dual registrants and affiliates, allowing current and prospective clients to compare services, fees, conflicts of interest and other important information in simple, easy-to-understand language.

Form CRS materials must be filed with the SEC by June 30. After July 1, Form CRS filings must be delivered to new and prospective clients and customers, and they are required to be delivered to all existing clients by July 30.

To streamline the Form CRS filing process, CSS’ Form CRS Automator extracts data from a company’s existing SEC filings, including more than 70 data points in Form ADV, Part 1A, as well as Financial Industry Regulatory Authority filings, “ensuring advisors can produce the correct descriptions applicable to their businesses,” according to Envestnet and CSS.

The software also gives advisors the option to further customize their Form CRS documents by exporting them to Microsoft Word. Because it is a web-based application, the Form CRS Automator requires no software implementation.

“Our partnership with CSS reinforces our ongoing commitment to putting our customers first by providing them with a unique, efficient, and compliant tool to prepare the newly required Form CRS filing before the deadline,” according to Blake Wood, senior vice president and director of product strategy at Envestnet.

“Facing a fast-approaching deadline, many RIAs and broker-dealers feel under pressure to assemble compliant and accurate information while correctly interpreting the SEC’s strict Form CRS requirements,” Jacqueline Hallihan, executive director of CSS’s Compliance Services, noted. “Our Form CRS Automator has been built in conjunction with CSS’s compliance professionals, and its output is consistent with regulatory guidance and Form CRS requirements — allowing advisors’ compliance teams to eliminate hours of research and troubleshooting.”

— Check out SEC Issues Updated FAQs on Reg BI, Form CRS on ThinkAdvisor.


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