SEC Adopts New ADV Part II: Extensive Disclosure and Publicly Available
The SEC has voted to completely overhaul ADV Part II. Advisers will have to provide the new document to clients in the first quarter of 2011. The new ADV Part II calls for a comprehensive prospectus-like narrative document to replace the current check-the-box form. The new ADV Part II will require extensive information about the advisor’s business, fee structure, investment strategies, disciplinary information, conflicts of interest, and brokerage practices. The form will also require supplemental resume-like brochures about the individuals servicing clients. The SEC will require advisers to file the new form electronically, thereby making the form available on the internet. The SEC indicated that it is coordinating with the state regulators to ensure a uniform format and filing regime regardless of jurisdiction.