Kinetic Partners reminds investment advisers registered with the Securities and Exchange Commission (“SEC”) that deadlines for certain client delivery obligations are approaching. The following summarizes these delivery obligations.
To satisfy the Brochure Rule under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), a registered investment adviser should annually deliver to its clients an updated Form ADV Part 2A. Form ADV Part 2A reminds investors of important information, such as the adviser’s fee schedule and material risks of investment. Such delivery must be made within 120 days of the adviser’s fiscal year end. Kinetic Partners also recommends including any relevant Form ADV Part 2B, which sets out important biographical information for certain investment advisory personnel, as a best practice.
In addition, an adviser to pooled investment vehicles, including hedge funds and private equity funds, may employ the “audit approach” to satisfy its obligations under the Advisers Act’s Custody Rule. This is accomplished by delivering audited financial statements to the investors in each fund within 120 days of the respective fund’s fiscal year end (180 days for a fund of funds).
Lastly, advisers have obligations in regards to the collection, utilization and maintenance of non-public personal information for certain clients. As per Regulation S-P, advisers must deliver the privacy policy notice to the required clients on an annual basis. If an adviser has not already done so, Kinetic Partners suggests including the privacy policy notice in the Form ADV Part 2 delivery.
Financial Services Compliance and Regulation
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