Take Note: Form ADV, Recordkeeping, and the New SEC Marketing Rule

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Get tips for meeting Form ADV and recordkeeping requirements under the new SEC marketing rule.

Our blog post series on the new SEC marketing rule dissects several topics, including the expanded definition of advertising, leveraging technology, testimonials and endorsements, performance advertising, hypothetical performance, third-party ratings, social media advertising, and overall best practices. In this post, we consider Form ADV and recordkeeping requirements under the new rule.

Let's start with an overview of the major changes to Form ADV prompted by the new rule.

Form ADV Changes

Currently, Form ADV Part 1 does not require disclosure of marketing practices other than in response to questions under Item 8 related to paying for client referrals. Based on new rule requirements, the Form ADV Glossary will be amended to include these marketing-related definitions. For more information on each key term, check out the related blog posts in our marketing rule series.

Form ADV Glossary Definitions

In Part 1A of Form ADV, Subsection L: Marketing Activities will be added to Item 5: Information About Your Advisory Business. In keeping with the other subsections under Item 5, subsection L must be updated only in the annual amendment.

Additionally, a series of new yes/no questions appear under Item 5L. These questions appear to be designed to help the SEC examination staff identify advisers using marketing practices the staff believes to be high-risk. Here’s a quick look at the yes/no questions added under Item 5L.

New YesNo Questions under Item 5L

Recordkeeping Requirements

The new rule also amends the books and records rule to stipulate important recordkeeping requirements. A notable clarification is that email archives are now an acceptable method of maintaining records of ads that are sent to investors, provided they are easily accessible for the required time period and can be promptly provided on demand.

Consider these recordkeeping requirements in each marketing-related category as you interpret and implement the new rule. Consult the other posts in our ongoing series for more information on the terminology referenced throughout.

Recordkeeping Requirements

Keeping up-to-date, comprehensive records—and accurately completing Form ADV and periodic amendments—requires a thorough understanding of new rule requirements. We’re here to help you make sense of all the complexities. In our next post, we’ll walk through the review and approval of ads.

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