New Questions Added to Form ADV Part 1
The SEC has released a new Form ADV Part 1a which includes a number of additions as described in greater depth below. Please also see the the paper version of the new Form ADV Part 1 which is currently effective.
Since enactment of the Dodd-Frank Act, the SEC has adopted a series of rules that have a significant impact on investment advisers and the IA registration process. Last year, amendments to the Form ADV Part 2 required registered investment advisers to provide new and prospective clients with a brochure and brochure supplements prepared using a “plain English” narrative approach. The new Form Part 2 became effective January 1, 2011 for new registrants and March 31, 2011 for registrants updating their Form ADV. Many states followed suit requiring the use of the new Form Part 2.
Overview of Major Changes to Form ADV Part 1
The new Form ADV Part 1 is now available on the IARD website. The changes reflect the new asset thresholds and the SEC’s effort to gather detailed information about investment advisers and their operations. For example, Section 7 now requires the following information about private funds (defined as “an issuer that would be an investment company as defined in section 3 of the Investment Company Act of 1940 but for section 3(c)(1) or section 3(c)(7) of that Act”):
- a private fund identification number (which is assigned to the fund)
- whether the fund is part of a master-feeder structure (and if so, information about the master and/or feeder funds)
- whether the fund is a “fund of funds”
- details about the beneficial owners of the fund
- information about whether the fund relies on an exemption from registration under Regulation D of the Securities Act of 1933
- details about the fund’s service providers
For firms who have not started the registration process, completion of the new Form ADV Part 1 will take longer because of the additional information that must be collected. For firms who have begun the process but have not yet been registered with the SEC or state, it is likely that the new information will be required to be submitted prior to registration being approved by the SEC or state securities commission. For advisers who are already registered with the SEC or state, the new questions will need to be completed as part of the Annual Updating Amendment (for more information, please see our post for the requirement in 2011 – we will have a similar post for 2012 after the new year). The due date for the Form ADV Annual Updating Amendment approaching is March 30, 2012.
Should you have any questions on the completion, submission, and/or reporting deadlines for Form ADV, please feel free to contact us or call Bart Mallon directly at 415-868-5345.
Cole-Frieman & Mallon LLP provides investment adviser registration and compliance services to private fund managers. The firm has a robust investment management practice catering to hedge fund managers, mutual fund managers and institutional investors.