Form ADV Part 2: Identifying and Disclosing Conflicts
June 16, 2011
1:00 PM – 3:00 PM ET
Description: The SEC, at its July 21, 2010 open meeting, finally approved the new Form ADV Part 2, a "plain English" narrative approach to client disclosure, which replaces the former Form ADV Part II "check-the-box" and Schedule F approach. Adopted rule changes require investment advisers to file their brochures electronically and the brochures would be available to the public on the IAPD. The compliance date for the new Form ADV Part 2 will be the date of the annual update for fiscal years ending on or after December 31, 2010, which would be the end of March 2011 for advisers with a December 31, 2010 fiscal year end. New advisers registering with the SEC after January 1, 2011, will need to use Form ADV Part 2.
Both SEC commissioners and staff emphasized the importance of meaningful, clear and useful disclosure, as well as the need for advisers to avoid legalese and boilerplate disclosures. The new form's instructions will focus disclosure on the adviser's actual practices and conflicts, as well as on practices and conflicts reasonably likely to exist. Disclosure of the material facts concerning conflicts and how the adviser deals with them will also be specifically required.
This course will examine the new form's 18 specific potential disclosure topics, including advisory business, fees and compensation, disciplinary events and brokerage practices. In addition, the panel will delve into the mechanics of the new "brochure supplement" requirement, which will be a résumé-like disclosure for each individual providing advice to a client. The session will also address:
- How to identify conflicts of interest within the framework of Part 2
- Tips for disclosing conflicts of interest, compensation arrangements, fee structures, soft dollars arrangements, etc.
- The implications of public access to your firm's brochure on the Investment Adviser Public Disclosure (IAPD) website
After attending this course, attendees should be able to:
- Identify the 18 specific disclosure topics of the new Form ADV Part 2
- Further identify conflicts of interest within your firm
- Apply "plain English" drafting techniques to the firm's Form ADV Part 2
For Whom: Chief Compliance Officers, Management, Compliance Staff at all levels, Auditors, Legal counsel
Suggested Skill Level: Basic to Intermediate
Instructional Method: Group-Internet-Based and Group Live
Pre-requisites for participation: No prerequisites are required. However, attendees can benefit by reviewing the Investment Advisers Act of 1940 to become familiar with the structure and terms, and the SEC adopting release IA-3060 Amendments to Form ADV (July 28, 2010).
Continuing Education Credits:
See NRS Continuing Education Guide
Recommended CPE Credit: 2
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