Notice of Request for Public Comment on Proposed Revisions to Form ADV Part 1B

The Board of Directors of the North American Securities Administrators Association, Inc. (“NASAA”) has authorized release for public comment the following revisions to Form ADV Part 1B.

Background and Discussion of Proposed Changes

The Uniform Application for Investment Adviser Registration and Report by Exempt Reporting Advisers (“Form ADV”) is used by investment advisers to register and/or report with the appropriate state securities regulators and the Securities and Exchange Commission (“SEC”). Investment advisers registering with one or more state securities regulators must complete Form ADV and also Part 1B. A completed Form ADV, including Part 1B, is a requirement for registration by every state, theDistrict of Columbia, the U.S. Virgin Islands, andPuerto Rico. 

Following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Form ADV was significantly revised in large part to carry out the provisions under Title IV of this new law. The proposed revisions to Part 1B of the Form ADV will (1) eliminate information that is now captured in other questions within the Form ADV; (2) capture limited additional information, and (3) make technical updates.

Download Form ADV Part 1B, with proposed revisions (redline)

Summary of Proposed Changes to Form 1B

  • Item 2.A. This item is being amended from a mandatory item to an item required when applicable.  CCO information is now captured in the Form ADV yet, despite this addition, the person responsible for supervision in the state of registration may not be the CCO of the Adviser (who could be located in another state).  Therefore, Item 2.A. is now designed to capture such information when applicable.
  • Items 2. C, 2.D and 2.I.  These questions are being revised to clarify the use of the term “you” in each item.
  • Item 2.G. This item is being amended to delete information collected in other places on the ADV and to add categories to collect information about the other business activities of investment advisers, their affiliates, and management persons.
  • Item 2.I.  This item is being amended to include additional custody information not currently captured in Part 1B, including information on “independent party” as used in the NASAA Custody Requirements for Investment Advisers (Model Rule 102(e)(1)-1)).  
  • New Item 2.K.  New Item 2.K. will collect information not now captured in the Form ADV.
  • Disclosure Reporting Pages. The arbitration disclosure reporting page is being amended to replace “NASD” with “FINRA.”  Additional disclosures are also now required of Advisory Affiliates.

Public Comment Period

The public comment period will remain open to August 13, 2012.  To facilitate consideration of comments, please submit comments to the following individuals: Melanie Senter Lubin (mlubin@oag.state.md.us), Chair of CRD/IARD Steering Committee, Pamela Epting, Chair of CRD/IARD Forms and Process Committee (pam.epting@fldfs.com), and Joseph Brady (jb@nasaa.org) and A.Valerie Mirko (vm@nasaa.org), NASAA Legal Department. We encourage, but do not require, comments to be submitted by e-mail. We also welcome any general comments on any other provisions in Part 1B.

NASAA Legal Department
Joseph Brady, General Counsel
A.Valerie Mirko, Assistant General Counsel
NASAA
750 First Street, NE, Suite 1140
Washington,DC 20002

NASAA Proposals, Regulatory Activity, Request for Comment