Where, When and How to Make a Disciplinary Disclosure in Regulatory Filings

Investment advisory firms and related individuals provide “disciplinary disclosures” to the public and the regulators though registration and reporting filings, which include for example and as applicable, Form ADV Parts 1A, 2A, and 2B, and Forms U4 and U5. Firms and individuals have respective obligations to correctly answer all questions on the registration and reporting documents and, at times beyond that, as fiduciaries to “make full disclosure to clients of all material facts relating to the advisory relationship.” However, not every disciplinary or legal situation requires a “disciplinary disclosure,” and some firms and individuals prefer not to disclose where not mandated by the question or fiduciary principles. We provide some insight below and remind firms and individuals to promptly analyze and understand “disciplinary disclosure” obligations whenever one becomes the subject of or connected to a complaint, investigation, examination, arbitration, proceeding, or the like.

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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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