Form adv part 2 software

Checklists is a compliance tool that helps advisers identify all rule requirements and each component of each item on the form. Advisers should consider them a means of proofreading against the rules once the document is complete in draft form.

The firm also offers ComplianceCasts, a web-based compliance training curriculum that offers more-in-depth guidance.

The tool in turn generates the SEC-required table of contents. Hill is a former adviser and founder of Hill Financial Advisors. She said that it is difficult not to favor the very comprehensive and free offering from Ascendant.

No matter which tool advisers select, however, Ms. Hill cautioned that they should not expect the templates to do everything for them.

Hill, who consults on a broad range of compliance issues, is working with advisory firms to help them complete the new forms. For larger firms, with more-complex forms, the rates are obviously much higher.

As for compliance tools, there are more-complex, and therefore more-expensive, solutions available to small and midsize firms.

Check my blog for more details on these and other firms. As for deadlines, SEC-registered advisers with fiscal years ending Dec. We need to know where our examination staff can obtain a complete set of your books and records. If books and records housed in multiple locations together create a complete set of your books and records, you must list each of those locations on Section 1. L of Schedule D. Q: My advisory firm is a very large firm with hundreds of branch offices throughout the country.

We keep most of our books and records at a small number of central locations. However, each branch office maintains some of its own records. Do I have to list each of our branch offices in Section 1. A: Not necessarily. You must list the main locations where your advisory firm's records are stored. If you also keep records in branch office locations, you should list them all see the answer to the previous question.

If the list would be extremely long, we would not object if you do not list every office that keeps only a small set of records. You must, however, make all records available to Commission staff upon request. Should the firm answer "yes" to Item 1. O, "assets" refers to the adviser's total assets, not the assets managed on behalf of clients. Non-proprietary assets, such as client assets under management, should be excluded when responding to Item 1.

O, regardless of whether they appear on an investment adviser's balance sheet. Updated June 12, An investment adviser registered with the SEC that files an annual updating amendment reporting that the adviser is not eligible for SEC registration must withdraw from registration within days of its fiscal year end, unless the adviser then is eligible for SEC registration.

A 1 to remain SEC-registered. Posted May 7, Q: My advisory firm serves as a portfolio manager under a wrap fee program. For purposes of counting the number of our clients to which we provided investment advisory services in the last fiscal year, should I count the wrap fee program itself as one client or should I count each of the participants in the wrap fee program as clients?

A: Each wrap fee program participant to whom you provided investment advisory services should be counted as a client. Q: How should I count clients for purposes of Item 5. For example, should a family be counted as a single client or multiple clients? How should I count a family trust set up for that family? If I provide advisory services to an individual for her own account and also provide advice regarding her IRA account, should I treat them as one or two clients?

A: When answering Item 5. D, count clients the way you normally count them for your firm. Some advisers, for example, treat multiple members of the same family and a family trust as a single client, and other advisers treat multiple members of the same family and a family trust as separate clients. Similarly, an adviser could reasonably treat an individual and the individual's IRA account as one--or two--clients, depending on the circumstances.

Q: Can I follow rule a 30 -1 under the Investment Advisers Act of when counting clients for purposes of Item 5. D of Form ADV? Rule a 30 -1 provides a safe harbor to investment advisers who are relying on the foreign private adviser exemption of the Investment Advisers Act of While you may rely on rule a 30 -1, it is not the exclusive method for determining who may be deemed a single client. The definition of "client" for Form ADV states that advisers must count clients who do not compensate the adviser.

For purposes of determining the types of our clients in response to Item 5. D, should I view the wrap fee program itself as one client or should I disclose the types of participants in the wrap fee program? A: To determine your types of clients, treat each wrap fee program participant to whom you provided advisory services as a client. Q: If my advisory firm acts as a subadviser to an investment company, business development company, or pooled investment vehicle, how should I respond to Item 5.

D about the category of clients? A: A firm that subadvises an investment company, business development company, or other pooled investment vehicle is providing advice to such company or vehicle. Accordingly, you should report those assets in Item 5. Do not report the client in Item 5. Q: Item 5. D requires advisers to report the approximate number of clients and the amount of total regulatory assets under management attributable to certain categories of client.

My advisory firm does not have any high net worth individual clients to report in Item 5. Should I check column 5. A: While the staff recognizes that the instructions to Item 5. Q: For purposes of Item 5. D, are "pooled investment vehicles" limited to private funds which are defined in the Form ADV Glossary? For purposes of Item 5.

D, pooled investment vehicles include, but are not limited to, private funds. Whether other types of funds aside from investment companies or business development companies, which are separate categories in Item 5. The staff believes that, in choosing a category for its client in Item 5.

For example, funds that would be investment companies as defined in section 3 of the Investment Company Act of but for sections 3 c 5 or 3 c 11 of that Act would typically be considered pooled investment vehicles in Item 5.

Similarly, UCITS funds that are regulated by the European Commission and that are not registered under the Investment Company Act would also typically be considered pooled investment vehicles in Item 5.

Additionally, the staff believes for purposes of Item 5. D there are some facts and circumstances in which it may be appropriate for an adviser to treat a single-investor fund also known as a "fund of one" as a pooled investment vehicle. For example, an adviser could reasonably treat a single-investor fund as a pooled investment vehicle where the fund seeks to raise capital from multiple investors but has only a single, initial investor for a period of time, or where all but one of the investors in the fund have redeemed their interests.

However, an adviser generally should not consider a single-investor fund to be a pooled investment vehicle if that entity in fact operates as a means for the adviser to provide individualized investment advice directly to the investor in the fund. I do not currently manage any assets. How should I respond to Schedule D, Section 5. A: For purposes of providing end of year information to respond to Section 5.

If you are required to report mid-year information on Schedule D, Sections 5. Q: I am an adviser to private funds and report information about parallel managed accounts to the private funds that I manage in Question 11 of Form PF, in accordance with the instructions to that form. Should I treat those parallel managed accounts as separately managed accounts for purposes of answering Item 5. K of Form ADV?

Item 5. K or Schedule D, Section 5. What types of transactions should I consider to be borrowings for purposes of reporting on Item 5. A: For purposes of Item 5. For the purposes of Item 5. Q: A client of my advisory firm arranged a personal loan without the firm's knowledge and used those loan proceeds to invest assets in its advisory account. A: Item 5. Accordingly, advisers are not required to report client borrowings of which they are not aware.

However, the adviser may not indirectly arrange borrowing transactions for separately managed account clients in order to circumvent any obligation to report those transactions on Form ADV. Q: When answering Schedule D, Section 5. If there is no gross notional exposure to report for the assets you manage for your separately managed account clients, you do not need to complete this section. As the instructional notes following Items 5. Q: A custodian that holds ten percent or more of my separately managed account clients' regulatory assets under management has arranged to use a "sub-custodian" for some custodial services, such as settling trades or trade execution.

In the circumstances described above, the staff believes that you are only required to report the custodian in response to Item 5. Section 5. Q: My advisory firm is a separate subsidiary of a bank.

Item 6. A 7 asks whether we are actively engaged in business as a bank -- should I mark Item 6. A 7 to indicate that we are? A: No, not if your firm is a separate subsidiary. A 7 asks if you, the registrant, are a bank. You are not a bank; your parent organization is the bank. If your parent organization or any other of your related persons is a bank, you should check the box in Item 7.

A 8 , but not Item 6. However, if you are a separately identifiable department or division of a bank, you must check the box in Item 6. Q: My firm advises private fund clients e. The private funds my firm advises may take a significant ownership interest in an issuer that is an operating company, and persons associated with my firm may participate in the management of the issuer in connection with the investment.

As a result, my firm may "control" an operating company. Does the instruction in Form ADV to disclose certain information regarding an adviser's "advisory affiliates," which is defined to include all persons directly or indirectly controlled by the adviser, require my firm to identify operating companies as "advisory affiliates" in Item 7 of Part 1A and Item 10 of Part 2A and report the disciplinary history of the persons controlled by such operating companies in Item 11 of Part 1?

Q: My advisory firm is part of a large organization and has hundreds of related persons to report in Item 7. My firm has no interaction with some of these related persons. Do I have to answer the questions about each of these related persons in Section 7. A of Schedule D? A: You the investment adviser can omit a related person from Section 7. A of Schedule D if you 1 have no business dealings with the related person in connection with advisory services you provide to your clients; 2 do not conduct shared operations with the related person; 3 do not refer clients or business to the related person, and the related person does not refer prospective clients or business to you; 4 do not share supervised persons or premises with the related person; and 5 have no reason to believe that your relationship with the related person otherwise creates a conflict of interest with your clients.

If you have related persons who are not listed on Section 7. A of Schedule D, you should use the Miscellaneous Section of Schedule D to state that you have a supplementary list of related persons who are not listed in Section 7. A, why they are not listed, and that you will provide a copy of that list upon request. However, you must complete Section 7. A of Schedule D for each related person acting as qualified custodian in connection with advisory services you provide to your clients other than any mutual fund transfer agent pursuant to rule 4 -2 b 1 , regardless of whether you have determined the related person to be operationally independent under rule 4 -2 of the Advisers Act.

Q: My advisory firm has a related person that is a foreign bank. This foreign bank provides investment advice to its customers for a fee. The foreign bank is not excepted from the definition of investment adviser under the Investment Advisers Act because the foreign bank is not a bank organized under U. Do I have to list this foreign bank as an adviser in Section 7. Q: Item 7. A asks if my advisory firm has a related person who is a broker-dealer Item 7.

A 1 or an investment adviser Item 7. Do we use these items to disclose that some of our employees perform investment advisory functions or are registered representatives of a broker-dealer? Information about your employees who perform investment advisory functions or are registered representatives of a broker-dealer is requested elsewhere on Form ADV.

The number of your firm's employees who perform investment advisory functions should be disclosed under Item 5.

The number of your firm's employees who are registered representatives of a broker-dealer should be disclosed under Item 5. If, however, you have a related person employee, director, etc. B indicates that I may seek to preserve the anonymity of a private fund to which I provide investment advisory services i.

If you seek to preserve the anonymity from the Commission of the name of a private fund to which you provide investment advisory services i. The Commission amended the instruction in Item 7. Q: Should a master fund in a master-feeder arrangement that is not completing a single Section 7. An adviser that is completing a separate Section 7. Q: I cannot locate the Form D file number number for the private fund required by question 22 on Schedule D, Section 7.

What should I enter for question 22? For private funds that filed a Form D prior to January 1, that were not required to file any amendments or updates after January 1, , the adviser should make reasonable efforts to locate this identification number. If the adviser is unable to locate the number for the private fund, then the adviser may enter all nines for the number e. Q: I am an adviser relying on the instruction in Item 7. Providing the Form D file number of the private fund in response to question 22 of Section 7.

How may I answer question 22 to maintain the anonymity of a private fund client? A: Advisers that identify a private fund client by code or similar designation may enter all nines for the Form D file number e.

If you or another adviser has already acquired an identification number for this private fund, do not generate a new identification number. You must use the existing number. If you and another adviser will report on the same private fund, you are responsible for coordinating with one another to ensure that you all use the same private fund identification number for that fund. The system will not store a copy of this identification number until you use it on a Form ADV submission or a Form PF submission for commodity pools.

As a result, you cannot retrieve this number if it is lost before you make your filing. Once you file information regarding a private fund on Form ADV, you must continue to use the same identification number whenever you amend that information.

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