M E M O R A N D U M
|TO:|| File S7-10-00
|FROM:|| Marticha Cary
|SUBJECT: ||Proposed Amendments to Part II of Form ADV
|DATE: || May 25, 2001
On March 15, 2001, Paul Roye, Cynthia Fornelli, Robert Plaze, Jennifer Sawin, and Marticha Cary met with Paul Gottlieb and Caryn Miller from Merrill Lynch ("Merrill") and Stephanie Monaco from Morgan, Lewis & Bockius to discuss the Commission's April 5, 2000 proposal to amend Part II of Form ADV and related rules. The meeting focused primarily on the proposed brochure supplement, but also covered the proposed updating requirement. At that meeting:
- Merrill questioned whether the Commission had any evidence that clients needed or wanted additional information about advisory personnel as would be required by the brochure supplements.
- Merrill argued that:
- the expense involved in creating, verifying, distributing, updating, and redistributing the supplements would be too great a burden for advisers without any commensurate benefit to clients;
- the information that would be required in the proposed supplements, including information about the background, experience and disciplinary information of advisory personnel, is irrelevant to clients' interests;
- clients do not want to be bombarded with the additional information and paperwork that the supplement requirement would entail; and
- the few clients who would want supplement information about advisory personnel would be able to obtain that information through the IARD or the U-4s of those personnel.
- Merrill objected to the proposed updating requirement that advisers deliver to clients written updates (i.e., stickers or revised brochures) whenever information in their brochure or supplements becomes materially inaccurate. Merrill suggested that advisers be able to fashion their own method of informing clients of material changes.