The SEC has released its instructions to prepare and file new Form CRS (aka Form ADV, Part 3). Both advisers and broker-dealers must deliver Form CRS to all retail clients i.e. “A natural person…who seeks to receive or receives services primarily for personal, family or household purposes.” Current advisers must file Form CRS by June 30 and deliver the Form CRS to all current clients by July 30. New clients must receive a Form CRS before entering into a client agreement. The Form CRS requires identifying information about the adviser or broker-dealer, a description of the relationship and services, disclosure about fees, costs, conflicts, and standard of conduct, and disciplinary information. The SEC has also previously published FAQs about Form CRS.
Our experience suggests that the SEC staff hews pretty closely to their published instructions during exams. We recommend following the instructions and the FAQs as closely as possible.