As the new year begins, now is an opportune time for us to provide you with a few reminders that should keep your investment adviser compliance “to do” list on track for 2015.

Regulatory Filings

  • Form ADV: All registered investment advisers (RIAs) and exempt reporting advisers (ERAs) must file an amendment to Form ADV with the US Securities and Exchange Commission (SEC) annually within 90 days of the end of their fiscal year, which is March 31 for those that have a December 31 fiscal year end. A few extra points to consider regarding Form ADV:
    • If RIAs and ERAs have multiple relying adviser entities, make sure to include a statement to the effect that the relying advisers are collectively filing a single Form ADV in reliance on the position expressed in the SEC No-Action Letter to the American Bar Association, Business Law Section, dated January 18, 2012.
    • Each client must receive annually (i) a copy of Form ADV Part 2  or (ii) a summary of any material changes to the brochure that also includes information on how the client obtains a copy of the updated brochure and where to get more information through the IAPD.
  • Form PF: Certain RIAs must also file an updated Form PF with respect to each of their funds under management with the SEC annually within 120 days of the end of their fiscal year, which is April 30 for those that have a December 31 fiscal year end. Depending on the size of AUM or the types of funds being advised, more frequent filing may be required (e.g., on a quarterly basis).
  • Form D: Advisers of funds with continuing offerings (e.g., hedge funds and any closed-end funds raising capital for longer than a year) must file an amended Form D on an annual basis on or before the first anniversary of the initial filing or the filing of the most recent amendment.
  • In addition to the annual Form D amendment, review state Blue Sky laws regarding any annual amendment to such state filings.
  • CFTC Exemption: Advisers that rely on the exemption from registration with the US Commodity Futures Trading Commission (CFTC) pursuant to Rule 4.13(a)(3), the “de minimis” exemption, must resubmit their claim of exemption annually within 60 days of the end of the calendar year, or by March 1.

Internal Compliance

  • Custody Rule Audit: To satisfy the SEC’s Custody Rule (Rule 206(4)-2 promulgated under the Investment Advisers Act of 1940, as amended), some RIAs obtain an annual audit for their funds under management by an independent public accountant registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board, and send such audited financial statements to clients within 120 days after the fund’s fiscal year end (i.e., April 30 for most funds that have a December 31 fiscal year end).
  • Privacy Policy: Provide each client with an updated copy of the adviser’s Privacy Notice.
  • Pay-to-Play: Obtain an annual certification from each employee attesting to his or her state and local political contributions, solicitations or payments to third-parties during the prior year.
  • Annual Compliance Review: RIAs must conduct an annual review of their policies and procedures to determine their adequacy and the effectiveness of their implementation.
  • Annual Securities Holdings’ Report: RIAs must obtain annual personal securities holdings reports from each applicable employee to review for possible insider trading matters.