Posted by Barry Hollander on 08/29/2016

SEC registered investment advisers will have to disclose more information about the separately managed accounts they advise, including data on borrowings and derivatives positions, under new amendments to Form ADV planned by the SEC.

The SEC will add questions to the ADV to enhance the disclosures investment advisers provide to their clients and the SEC.

Information related to separately managed accounts will include:

  1. borrowing and derivatives;
  2. branch office operations; and
  3. use of social media.

"These amendments are an important step in a series of rulemakings to enhance the SEC’s monitoring and regulation of the asset management industry," said SEC chair Mary Jo White. 

"Requiring investment advisers to report this additional information will provide investors and the Commission with a better understanding of the risk profile of each adviser and the industry as a whole."

In addition to the disclosures referenced above, new books and records requirements related to the calculation and distribution of performance information will be required

These records, the SEC claims, will be key to evaluating adviser performance claims and could reduce the incidence of misleading or fraudulent advertising and communications by advisers.

Advisers will need to begin complying with the new rules by October, 2017.