(Bloomberg) — If you send investors documents showing you’ve delivered a 20% return, now you really have to prove it.
Wall Street’s main regulator is going to require investment advisers to create and maintain any documents that are distributed demonstrating performance calculations or returns, according to a statement Thursday. That will make it easier for the SEC to identify fraudulent advertising and pursue misleading claims.
In addition to the new record-keeping requirements, the SEC approved changes Thursday to the so-called ADV form, which investment advisers use to register with the agency. Firms will now have to disclose additional information about separately managed accounts, such as their use of derivatives. Other modifications will streamline registration and reporting for groups of private fund advisers that operate as a single advisory firm.
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After more than three-and-a-half years at the helm, Mary Jo White made incremental moves to expand advisor exams, but did not move on structural reform or implement a uniform fiduciary standard, as many advocates had hoped.
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While it’s early in the process, a number of names are being floated as possible contenders.
November 14
“These amendments are an important step in a series of rulemakings to enhance the SEC’s monitoring and regulation of the asset management industry,” SEC Chairwoman Mary Jo White said in a statement. “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.”
