RIA Compliance Services

RIA Compliance Services.  Yesterday, OCIE released a Risk Alert for registered investment advisors outlining their examination focus on the new Form CRS (“Relationship Summary”). OCIE’s examinations after the filing deadline of June 30, 2020 will focus on the following relating to the relationship summary:

Filing & Delivery of the Form CRS

  • Was the Form CRS by the June 30, 2020 deadline;
  • Was the Form CRS delivered to Retail Investors by July 30, 2020 (within 30 days of filing on the IARD system);
  • Has the firm delivered to new Retail Investors before or at the earliest of?
    • Entering into an investment advisory contract;
    • A recommendation to a retail investor of an account type, a securities transaction, or an investment strategy involving securities;
    • Placing an order for the Retail Investor, or
    • Opening a brokerage account for the Retail Investor.

Content of the Form CRS

  • Does the relationship summary include all the required information based on the instructions; contain true and accurate information; is it consistent with information in the Brochure; are all conflicts of interest disclosed; how firms are compensated is properly disclosed; and, disciplinary history is properly disclosed.

OCIE will confirm the relationship summary is Formatted in accordance with the instructions.

Updates

  • They will review your policy & procedures for updating the relationship summary; assess how your firm updates and files the relationship summary within 30 days of information becoming materially inaccurate; assess how your firm communicates these changes to retail investors within 60 days after the update; and, assess your firm’s process for highlighting to your retail investor the most recent changes including an exhibit highlighting or summarizing the change.

Recordkeeping

  • OCIE will review your firm’s records for delivery of the relationship summary to your clients and review your policies and procedures regarding your recordkeeping obligations.

The IARD system will begin accepting the filing of the relationship summary as of May 1, 2020, with the deadline of June 30th for the relationship summary to be filed.  If you need guidance with the preparation and filing of this relationship summary call us today!  We’re here to provide you with our RIA compliance services.

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