Form CRS and Its Impact on State-Registered Advisers

While many investment advisers are starting to plan for Form CRS/Form ADV Part 3, one group of investment advisers can breathe a sigh of relief that this is a project that does not need to be on their ‘To Do’ list. As of now, no state regulator has adopted this disclosure document for state-registered advisers. And based on the North American Securities Administrators Association’s (NASAA) initial comment letter to the SEC related to Form CRS, it is unlikely this will be advocated for.

As of now, it is too early to tell if NASAA will present a Form CRS model rule. Frankly, since state advisers are already required to submit Form ADV Part 1A, Part 1B, Part 2A and Part 2B, it can be argued they provide sufficient disclosure already! And while CSS will continue to track the status of any state adoption of the Form CRS, we believe this is not on the near horizon. It might be more likely that NASAA will focus on revising the Form ADV Part 1A and 1B instead.

Remember though that if a state-registered adviser is also dually registered, Form CRS may still be necessary to disclose your brokerage practices. And finally, should a state-registered adviser voluntarily choose to create and maintain a Form CRS, they should seek guidance from their State Regulator on any concerns of adopting a document not required by their regulator!

Need help planning for Form CRS, Form ADV or for any other federal or state securities regulations? Our Ascendant consulting division offers a thorough range of compliance management services that are designed to help clients meet their regulatory responsibilities while allowing them to focus on their core businesses. Explore our offerings and contact us.

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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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