SEC Adopts Rules to Enhance Information Reported by Investment Advisers

The Securities and Exchange Commission today adopted amendments to several Investment Advisers Act rules and the investment adviser registration and reporting form to enhance the reporting and disclosure of information by investment advisers.  The amendments will improve the quality of information that investment advisers provide to investors and the Commission. 

“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.”

The amendments will require investment advisers to provide additional information regarding their separately managed account business, including aggregate data related to the use of borrowings and derivatives, and information about other aspects of their advisory business, including branch office operations and the use of social media.  In addition, the amendments will facilitate streamlined registration and reporting for groups of private fund adviser entities operating a single advisory business.  

Amendments to Investment Advisers Act Rule 204-2 will require advisers to maintain additional records related to the calculation and distribution of performance information. These records will be useful to the Commission’s examinations staff in evaluating adviser performance claim, and could reduce the incidence of misleading or fraudulent advertising and communications by advisers.

The amendments will be published on the Commission’s website and in the Federal Register.  They will become effective 60 days after publication in the Federal Register, and advisers will need to begin complying with the amendments on Oct. 1, 2017.