Earlier this month. the Oklahoma Securities Commission announced they will require Oklahoma-registered investment advisers ("RIAs") to follow the Securities and Exchange Commission's ("SEC") Form CRS filing requirements. According the Oklahoma Securities Commission, "Pursuant to Section 1-406 of the Oklahoma Uniform Securities Act of 2004 ('OUSA') and 660:11-7-11 and 660:11-7-20 of the Rules of the Oklahoma Securities Commission and the Administrator of the Department of Securities ('Rules'), entities registering or registered as investment advisers under the Act must file the Form CRS Relationship Summary as a part of the Form ADV filing requirement. The SEC has mandated that investment advisers registered federally must file before June 30, 2020. Oklahoma-registered investment advisers should meet this same deadline."
UPDATE: On Friday, June 19, the Oklahoma Securities Commission informed Oklahoma-registered investment advisers they will no longer be required to file the new Form CRS at this time.
Form CRS Filing Requirements
The new Form CRS rule requires certain SEC-registered investment adviser ("RIA") and broker dealer firms to provide a brief relationship summary to new and existing retail investors known as the Form CRS. The new disclosure document is a somewhat prescriptive two page document with five mandated sections. Investment advisers subject to the new requirement need to file the Form CRS no later than June 30, 2020 using the Investment Adviser Registration Depository (“IARD”) system. According to the Oklahoma Securities Commission, "that currently the functionality of the IARD through which SEC-registered investment advisers are to file the Form CRS does not give access to state-registered IAs to file such form in the same way (unless they are dually registered)." So as a result, the Oklahoma Securities Commission is requiring Oklahoma-registered IAs "to file the Form CRS through the IARD by clearly labeling it as 'Form CRS' and attaching it as an upload under Part 2 of the Form ADV."
Form CRS Delivery Requirements
In addition to filing the new Form CRS, the Oklahoma Securities Commission also outlines delivery requirements. According to the announcement the Oklahoam Securities Commission states:
"Although the Rules do not explicitly require the delivery of the Form CRS to clients, as a fiduciary, an investment adviser is obligated to ensure that clients understand the capacity in which it is functioning. Since this is the whole purpose of the form, delivering the Form CRS to clients will now be a best practice for Oklahoma-registered investment advisers. Such delivery would particularly be true for dually-registered firms and their representatives. The SEC has mandated that delivery should occur within 30 days of a firm filing its Form CRS. It would be a best practice for Oklahoma-registered investment advisers to deliver the Form CRS within 30 days of a firm filing its Form CRS."
At RIA in a Box, we assist all MyRIACompliance subscribers with the creation of the new Form CRS for no additional charge via our automated online Form CRS creation tool. In addition, we have a dedicated resource page accessible to the public which shares an overview of Form CRS submission requirements and relevant checklists and links. The resource page will continue to be updated with resources and details as they become available.
Be sure to check back soon as we continue to provide updates on the new Form CRS requirement and other relevant RIA regulatory compliance focus areas.