Form CRS is perhaps the most contentious regulation stemming from the SEC’s advice standards package
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It should be noted, however, that a dual registrant can prepare a separate Form CRS for its advisory and broker-dealer services. The FAQs also clarify that private fund sponsors need not deliver a Form CRS to retail investors in the funds.
Also noteworthy is that the delivery of the Form CRS can be included with other document delivery so long as it is “the first among any documents delivered … at that time” or is “presented prominently in the electronic medium.” A main component — and a key rationale for its existence, according to the SEC — is that its configuration allows for comparability among RIAs and BDs in a manner distinct from other mandated disclosures.
Our take? It's time to start drafting. Call your lawyers and compliance pros to craft the Form CRS before the experts fill up their dance cards. After all, there are approximately 13,000 registered investment advisers and over 3,000 broker-dealers out there, most of whom have to prepare a Form CRS.
(With additional writing by Mark DeAngelis, chief compliance officer of Cipperman Compliance Services)