SEC Announces Limited Time Extension for Preparation and Delivery of Form ADV Part 2B Brochure Supplements

The new Form ADV Part 2, which requires investment advisers to provide significant additional information about the firm and its supervised persons than was required by previous versions of the form, was adopted on July 28, 2010. The revised Form includes Part 2A “firm brochure” (covering the advisory firm itself) and Part 2B “brochure supplement” (calling for detailed information about the supervised persons of the adviser). In the adopting release, the SEC indicated that advisers with a fiscal year ending December 31 would be required to deliver their first brochure supplements to new and prospective clients no later than March 31, 2011 and to existing clients no later than May 31, 2011. However, in response to concerns expressed in a letter to the SEC from the Securities Industry and Financial Markets Association (“SIFMA”), the SEC issued a release on December 28, 2010, indicating that it has agreed to extend the compliance date for the delivery of brochure supplements in order to give advisers “additional time to design, test and implement systems and controls that will assure that each client receives an accurate brochure supplement with respect to the supervised person who provides advice to that client.” Notably, the new compliance dates do not apply to the preparation and filing of firm brochures on Form ADV Part 2A, which must still be filed by March 31, 2011 for advisers with fiscal years ending December 31.

The length of the extension differs depending on whether firms are already registered or newly registering. The new compliance dates are as follows:

  • Existing Advisers: All investment advisers registered with the Commission as of December 31, 2010, and having a fiscal year ending on December 31, 2010 through April 30, 2011, have until July 31, 2011, to begin delivering brochure supplements to new and prospective clients and until September 30, 2011 to deliver brochure supplements to existing clients.
  • Newly Registered Advisers: All newly registered investment advisers filing their applications for registration from January 1, 2011 through April 30, 2011, have until May 1, 2011 to begin delivering brochure supplements to new and prospective clients and until July 1, 2011 to deliver brochure supplements to existing clients.

For additional information about the new compliance dates for the delivery of brochure supplements, please call us at (619) 278-0020.