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Will Individual States Require Form CRS Submissions?

Monday, August 31, 2020

On June 30, 2020, the SEC began the enforcement of Regulation Best Interest (“Reg BI”).

This guidance requires all SEC-registered investment advisers and broker-dealers to be in compliance with the newly adopted Regulation Best Interest (Reg BI) and to file the Form CRS/ADV Part 3 on IARD/CRD.

While the guidance covers investment advisers and broker-dealers registered at the federal level, most states have not chosen to require the form from advisers registered at the strategic level.

However, there is at least one state currently requiring the filing.

Rhode Island’s Requirement for Form CRS

According to Securities Bulletin Number 2020- 2, the Rhode Island Department of State will require the Form CRS pursuant to Section 209(c)(1) of the Rhode Island Uniform Securities Act) and 230-RICR-50-05-2.7-B of the Rules and Regulations of the Rhode Island Securities Department and the Administrator of the Department of Securities.

While the statutory guidance isn’t explicit regarding the form, it does give the state authority to require investment advisers and broker-dealers to file whatever documents they “determine necessary” with the state. Rhode Island-registered investment advisers will need to file this information and make it available to their investors.

Initially, Oklahoma also communicated the state-level form as a requirement. While the state has since rescinded this requirement, it continues to be evaluated as a potential best practice.

While no other states are making this filing a requirement currently, some regulators have noted that the Form CRS provides helpful, plain-language guidance that can be beneficial to clients/ relationships.

As additional states consider the addition of this requirement, we will update this blog post to ensure it reflects the most up-to-date Form CRS filing information. If you need guidance or support with this or other regulatory filings, our compliance consulting team is available to help.

To learn more about Form CRS and Reg BI, review these posts:

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry, serving clients with more than $19 trillion in assets under management. Red Oak’s advertising compliance review software offers quick implementation timelines, as well as agile technology that responds to client needs and is 100% Books and Records compliant. Our clients report 35% faster approvals and 70% fewer touches, with many experiencing even better results. Are you ready to minimize risk, reduce costs, and improve efficiency?  Contact the Red Oak team to learn how.

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.

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