When the SEC amended Form ADV Part 2, it also amended the Brochure Delivery Rule, Rule 204-3. Prior to the amendment, firms were required to make an annual offer of Form ADV Part 2 to existing clients, but were not required to send the brochure annually, unless requested. Now, firms with material changes are required to actually deliver Form ADV Part 2 (or the appropriate wrap brochure) plus the brochure supplements to existing clients within 120 days of the firm's fiscal year-end date and without charge to the client. In lieu of the Form ADV Part 2, firms may send a special notice of material changes that must include:
- The Item 2 material changes as described in your brochure
- An offer to provide your current brochure without charge
- Your website address, email contact, and phone number for obtaining the brochure
- IAPD website contact url for obtaining information on your firm (link to ADV Part 1)
For any new disciplinary disclosures, your firm must promptly send the following:
- The amended brochure or brochure supplement (as applicable) along with a written statement describing the change in disciplinary information, OR
- A written statement describing the material facts related to the changed disciplinary information
The delivery requirement for new clients and prospects remains the same (it should occur before or at the time of entering into an advisory agreement).
View complete description of brochure delivery requirements
FrontLine Compliance, LLC is a regulatory compliance consulting firm of former high-level regulatory insiders offering customized services to investment advisers, broker-dealers, hedge funds, private equity firms, investment companies, and insurance company affiliates. Staffed by former SEC and FINRA regulators, and chief compliance officers, FrontLine Compliance provides the kind of industry knowledge, experience and expertise on regulatory issues only available from well-seasoned insiders. For more information about the firm, please visit www.frontlinecompliance.com.
FrontLine Compliance, LLC
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