Beginning in the spring of 2020, registered investment adviser ("RIA") firms registered with the Securities and Exchange Commission ("SEC") that serve retail investors are required to file and distribute the new Form ADV Part 3 Customer Relationship Summary (commonly referred to as the Form CRS) to their current and prospective retail investors. There are a number of steps an SEC-registered RIA firm can take to help prepare to meet the June 30, 2020 initial filing deadline.
How RIA in a Box Helps RIA Firms Create the Form CRS
Much like we help to streamline the creation and filing of an investment adviser's firm Form ADV Parts 1 and 2, RIA in a Box has designed a proprietary online tool to help automate creation the new Form CRS:
- All RIA in a Box MyRIACompliance® subscribers have access to the proprietary online Form CRS tool
- RIA in a Box utilizes the firm’s existing Form ADV data, along with a short, rules-based smart questionnaire to streamline the Form CRS creation process
- The Form CRS is crafted using "Plain English" and is built to be machine readable to meet SEC requirements
- The RIA in a Box team of compliance experts then works with the RIA firm, allowing the adviser to make any additional edits to the Form CRS
- The Form CRS tool is available for no additional charge to all MyRIACompliance® subscribers.
The specific process that an RIA firm will follow to create their Form CRS in MyRIACompliance® is as simple as:
1. The firm will create a new Form CRS request from the “Custom Documents” page, the same page where a firm can create a request for other Form ADV documents.
2. Once the request has been created, the firm will be prompted to start a short questionnaire. The information from this questionnaire will be used to create the firm’s draft Form CRS.
3. Once the request has been initiated, the firm will have a Form CRS progress tracker on the top of the MyRIACompliance® home page.
4. The firm will then be notified when their draft filing is ready for their review. At that time, the firm can either approve or make any modifications.
5. Once the firm approves their filing, RIA in a Box will submit the firm’s Form CRS filing on the investment adviser registration depository and the RIA will be prompted to deliver the Form CRS to its clients and instructions on how to post the firm's new Form CRS disclosure document to its website.
What to Keep in Mind About the Form CRS
- Presently, SEC-registered RIA firms that serve retail investors are required to publicly file and provide the Form CRS to prospective and existing clients.
- In paper format, the Form CRS for investment advisers must not exceed two pages using reasonable paper size, font, and margins.
- RIA firms should draft their Form CRS using "plain English,” avoiding legal jargon and technical business terms unless clearly explained.
- For SEC-registered RIA firms required to file the Form CRS, the initial filing may be made beginning on May 1, 2020 and must be submitted no later than June 30, 2020.
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