The New Form ADV Part 2 Presented by Patrick J. Burns, Jr., Esq. of the Law Offices of Patrick J....
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The New Form ADV Part 2 Presented by Patrick J. Burns, Jr., Esq. of the Law Offices of Patrick J. Burns, Jr., P.C. and Advanced Regulatory Compliance, Inc. The following presentation is for general discussion purposes only and is not to be construed as legal advice for any person and/or firm. Some of the discussion points and answers to FAQs have been abbreviated, so you are encouraged to read the full version of SEC IA Release No. 3060 and consult with your attorney or regulatory consultant. ©2010-2011 Law Offices of Patrick J. Burns, Jr., P.C. and Advanced Regulatory Compliance, Inc. All Rights Reserved. 1
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Transcript of The New Form ADV Part 2 Presented by Patrick J. Burns, Jr., Esq. of the Law Offices of Patrick J....
The New Form ADV Part 2
Presented by Patrick J. Burns, Jr., Esq. of the Law Offices of Patrick J. Burns, Jr., P.C. and Advanced Regulatory Compliance, Inc.
The following presentation is for general discussion purposes only and is not to be construed as legal advice for any person and/or firm. Some of the discussion points and answers to FAQs have been abbreviated, so you are encouraged to read the full version of SEC IA Release No. 3060 and consult with your attorney or regulatory consultant.
©2010-2011 Law Offices of Patrick J. Burns, Jr., P.C. and Advanced Regulatory Compliance, Inc. All Rights Reserved.
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• To whom must you deliver a Firm Brochure? You must deliver a Firm Brochure to each client.
• When must you deliver a Firm Brochure to clients? You must give it to each client before or at the time that you enter into an advisory agreement with them. Each year, you must (i) deliver within 120 days of your fiscal year end, to each client a free updated Firm Brochure that either includes a summary of material changes or is accompanied by a summary the same, or (ii) deliver to each client a summary of material changes that includes an offer to provide a copy of the updated Firm Brochure and information on how a client may obtain it.
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• You do not have to deliver to clients interim amendments of your Firm Brochure unless the amendment includes information in response to Item 9 of Form ADV Part 2A (disciplinary information). An interim amendment can be in the form of a document describing the material facts related to the amended disciplinary event.
• May you electronically deliver your Firm Brochure? Yes. The SEC has published interpretative guidance on this issue at www.sec.gov/rules/concept/33-7288.txt
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• When must you update your Firm Brochure? You must update your Firm Brochure: (i) each year at the time you file your annual updating amendment; and (ii) promptly whenever any information in your Firm Brochure becomes materially inaccurate. You are not required to update your Firm Brochure between annual amendments solely because the amount of client assets you manage has changed or because your fee has changed.
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• However, if you are updating your Firm Brochure for a separate reason in between annual amendments, and the amount of client assets you manage listed in response to Item 4.E or your fee schedule listed in response to Item 5.A has become materially inaccurate, you should update that Item(s) as part of the interim amendment. All updates to your Firm Brochure must be filed through the IARD System and maintained in your files.
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• Do you have to include a summary of material changes that you prepare in response to Item 2 with your annual updating amendment filing through the IARD system? Yes, you need to include the summary in your annual updating amendment.
• May firms include a summary of their Firm Brochure at the beginning of such document? Yes.
• Can a firm prepare multiple Firm Brochures? Yes. If your firm offers substantially different types of advisory services, you may opt to prepare separate Firm Brochures so long as each client receives all applicable information about fees and services.
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FAQs and Notable Points Form ADV Part 2A
Firm Brochure
• Is there a different brochure that needs to be delivered to wrap fee clients? Yes.
• May firms include information not required by an Item in their Firm Brochure? Yes.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• To Whom must you deliver a Wrap Fee Program Brochure? If you sponsor a wrap fee program, you must provide a Wrap Fee Program Brochure to each wrap fee program client.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• When must a Wrap Fee Program Brochure be delivered? You must give it to each client before or at the same time the client enters into a wrap fee contract with your firm. Each year you must (i) deliver, within 120 days of your fiscal year, to each client a free Wrap Fee Program Brochure that either includes a summary of material changes or is accompanied by a summary of material changes, or (ii) deliver to each client a summary of the same that includes an offer to provide a copy of the updated Wrap Fee Program Brochure and information on how a client may obtain it.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• You do not have to deliver an interim amendment to clients unless the amendment includes information in response to Item 9 of Part 2A (disciplinary information). An interim amendment can be in the form of a document describing the material facts relating to the amended disciplinary event.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• When must you update your Wrap Fee Program Brochure? You must update your Wrap Fee Program Brochure: (i) each year at the time you file your annual updating amendment, and (ii) promptly whenever any information in the Wrap Fee Program Brochure becomes materially inaccurate.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• What happens if you sponsor more than one wrap fee program? You may prepare a single Wrap Fee Program Brochure describing all your wrap fee programs you sponsor, or you may prepare separate Wrap Fee Program Brochures that describe one or more of your Wrap Fee Programs. If you prepare separate brochures, each brochure must state that you sponsor other wrap fee programs and explain how the client can obtain brochures for the other programs.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• Suppose you provide portfolio management services under a wrap fee program that you sponsor. Do you need to deliver both your Wrap Fee Program Brochure and your Firm Brochure to your Wrap Fee Program clients? No, just the Wrap Fee Program Brochure. If you or your supervised persons provide portfolio management services under a wrap fee program that you also sponsor, your Wrap Fee Program Brochure must describe the investments and investment strategies you (or your supervised persons) will use as portfolio managers.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• Suppose you provide other advisory services outside of your wrap fee programs. May you combine your Wrap Fee Program Brochure into your Firm Brochure for clients receiving these other services? No. Your Wrap Fee Program Brochure must address only the Wrap Fee Programs you sponsor.
• Must you also deliver Brochure Supplements to Wrap Fee Program clients? Yes.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• You are not required to update your Wrap Fee Program Brochure between annual amendments solely because your fee schedule has changed. However, if you are updating your Wrap Fee Program Brochure for a separate reason in between annual amendments, and your fee schedule listed in response to Item 4.A has become materially inaccurate, you should update that item as part of the interim amendment. All updates to your Wrap Fee Program Brochure must be filed through the IARD system and maintained in your files.
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FAQs and Notable Points Form ADV Part 2A Appendix 1Wrap Fee Program Brochure
• May you electronically deliver your Wrap Fee Program Brochure to clients? Yes. The SEC has published guidance on delivering documents electronically at www.sec.gov/rules/concept/33-7288.txt
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FAQs and Notable Points Form ADV Part 2B
Brochure Supplement
• For whom do investment advisers need to create a Brochure Supplement? You need to create a Brochure Supplement for any supervised persons who formulates investment advice for a client and has direct client contact; and any supervised person who has discretionary authority over a clients’ assets, even if the supervised person has no direct client contact.
• To whom must investment advisers deliver Brochure Supplements? In general, you must deliver Brochure Supplements to a client for each supervised person who provides advisory services to a client.
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FAQs and Notable Points Form ADV Part 2B
Brochure Supplement
• When must a firm deliver a Brochure Supplement to a client? You must deliver a Brochure Supplement for a supervised person before or at the time that supervised person begins to provide advisory services to a client. Also, you must deliver to clients any update to the Brochure Supplement that amends information in response to Item 3 of Part 2B (disciplinary information). Such an amendment can be in the form of a “sticker” that identifies the information that has become inaccurate and provides new information and the date of the sticker.
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FAQs and Notable Points Form ADV Part 2B
Brochure Supplement
• When must firms update Brochure Supplements? You must update them whenever any information in them becomes materially inaccurate.
• May firms electronically deliver Brochure Supplements? Yes.
• Must Brochure Supplements be separate documents? No. If your Firm Brochure contains all the information required in a Brochure Supplement, you do not need a separate document.
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FAQs and Notable Points Form ADV Part 2B
Brochure Supplement
• Must an adviser who is a sole-proprietor provide his own Brochure Supplement to clients? Not if equivalent information is in his Firm Brochure.
• May firms include information not required by an Item in a Brochure Supplement? Yes.
• Are firms required to file Brochure Supplements? SEC registered firms are not, while state registered firms are required to file them through the IARD system and maintain them in their files.
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Thank you
Patrick J. Burns, Jr., Esq.
The Law Offices of Patrick J. Burns, Jr., P.C.
415 N. Camden Dr., Ste. 223
Beverly Hills, CA 90210
Ph (310) 275-5059
Email [email protected]
Website www.pjblawoffice.com
Advanced Regulatory Compliance, Inc.
www.advreg.com
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