SEC Says No to Extending Form CRS, Reg BI Deadlines
IAA Expresses Disappointment on Form CRS
Updated April 7, 2020
The SEC has declined to extend the filing and delivery deadlines for the new Form CRS and the implementation date for new Regulation Best Interest.
In an April 2 statement, Chairman Jay Clayton instructed firms to “continue to make good faith efforts around operational matters to ensure compliance by June 30, 2020, including devoting resources as necessary and available in light of the circumstances.” He invites firms to engage with the SEC “[t]o the extent that [they are] unable to make certain filings or meet other requirements because of disruptions caused by COVID-19, including as a result of efforts to comply with national, state or local health and safety directives and guidance.” He notes that he “expect[s] that the Commission and the staff will take the firm-specific effects of such unforeseen circumstances (and related operational constraints and resource needs) into account in our examination and enforcement efforts.”
IAA President & CEO Karen Barr expressed surprise that the SEC would not be providing relief from the Form CRS deadline in light of the business disruptions caused by the coronavirus pandemic.
The IAA has developed robust resources to help firms implement Form CRS, including a Form CRS sample template, FAQs, and a checklist. Members can also access recordings of two webinars – You Ask – and We Answer – Your Form CRS Questions (March 24, 2020) and New Form CRS for Advisers Explained (July 19, 2019). A video from the IAA’s March Compliance Conference – Countdown to Form CRS – is also available.
“We have been very concerned about investment advisers’ ability to meet the Form CRS deadlines in the situation we find ourselves in,” Barr said. “We had asked the SEC staff for more time to prepare for Form CRS and we are disappointed that no adjustment was made to the deadline. Firms need to focus on serving clients during this turmoil and ensuring their BCPs and operations are working smoothly. They must also focus on the health of their employees and taking care of their families.”
Barr welcomed Chairman Clayton’s statement that the agency will take the current extraordinary circumstances into account in its exam and enforcement efforts.
As OCIE Director Peter Driscoll signaled at the IAA’s March Compliance Conference, OCIE has published a Risk Alert about the scope and content of initial examinations for Form CRS and a separate Risk Alert on Reg BI (see related story on the new Risk Alert).
The IAA will continue to keep SEC staff informed of impacts that the coronavirus situation is having on our member firms and potential compliance relief that may be appropriate. We will also continue to work with members to assist with your compliance efforts, including through the IAA’s Form CRS Implementation Working Group. Please continue to share information with us about how your business operations are being affected by contacting the IAA Legal Team at IAALegalTeam@investmentadviser.org or at (202) 293-4222.
TAGS: Coronavirus, News, Form CRS, Reg BI