For those of us who are working remotely, it can be challenging to remember which day of the week it is – there’s not a lot of differentiation between workdays when you’re out of your typical office routine.
However, the year does keep moving forward, and that means deadlines need to be met in order to stay compliant.
What’s on the compliance radar for early summer 2020? Form CRS is a new filing requirement for those who provide financial/investment services to retail clients.
What Should I Know About Form CRS?
SEC registered investment advisers, broker-dealers, and dual registrants must complete and submit Form CRS by June 30, 2020. Form CRS is designed, according to the SEC, to provide investors with “simple, easy-to-understand information about the nature of their relationship with their financial professional” so they can more easily make comparisons between different firms and their offerings.
Because these guidelines, as part of Reg BI (Regulation Best Interest) are being applied for the first time this year, your firm may have additional questions regarding the submission process:
What Does “Due” Actually Mean In Regard To Form CRS?
By June 30, 2020, all investment advisers, broker-dealers, and dual-registrants must submit their documentation.
- Investment advisers should submit Form ADV, Part 3 through IARD (Investment Adviser Registration Depository)
- Broker-dealers should file Form CRS through CRD (Central Registration Depository)
- Dual registrants are required to file both
In addition, the form must be delivered to all retail clients within 30 days of the June 30, 2020 deadline.
Who Is Required to Complete Form CRS?
Anyone who is registered with the SEC as an investment adviser, a broker-dealer, or a dual-registrant, and who does business with retail investors must complete the form. If you work solely with institutional investors, the form does not apply to you.
What Else Should I Know About Completing Form CRS?
The SEC is taking Reg BI and the filing of Form CRS very seriously. In addition to completing the form, all SEC registered advisers should prepare for either an onsite or phone audit regarding the Form CRS as soon shelter in place orders are lifted.
And, if you need guidance to complete the filing process, our Red Oak Compliance Consultants are available to support you and your team.
Is There Anything Else I Should Be Keeping On My Regulatory Radar?
As your firm has been dealing with the effects of the pandemic, you’ve likely been communicating more frequently with your clients, keeping them updated, and helping them to make financial sense of current market conditions.
Pay particular attention to your record retention during this time. When it comes to marketing and advertising companies, making sure you’re tracking all communications, disclosures, and versioning.
Financial providers are generally held to a high standard when it comes to safeguarding their clients’ best interests, and Reg BI has made the focus on advisors’ burden of care even more significant.
You’ll want to make sure your documentation is in good order so that you’re prepared for audit reviews once we’re all back in the office. If you need a tool to manage this process and give you peace of mind, talk to our team about how Red Oak can make the compliance review process and audit prep process easier, more seamless, and more efficient.
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.