SEC Provides Guidance on Form CRS Delivery Requirements and Formatting

Posted on December 3rd, 2019 at 1:52 PM
SEC Provides Guidance on Form CRS Delivery Requirements and Formatting

From the Desk of Jim Eccleston at Eccleston Law LLC:

On November 26, 2019, the Securities and Exchange Commission (“SEC”) published an FAQ regarding Form CRS (a.k.a. “relationship summary”), prepared by the staff of the Division of Investment Management and the Division of Trading and Markets.   In the FAQ, the SEC specifies that the responses represent the views of the staff of the Division of Investment Management and the Division of Trading and Markets, and should not be construed as a rule, regulation, or statement of the SEC.  The SEC further specifies that the FAQ was neither approved nor disapproved by the SEC, and the FAQ has no legal force or effect.

Among the topics addressed by the FAQ is the delivery requirements of Form CRS.  According to the FAQ, a firm may satisfy the delivery requirements of Form CRS by delivering the relationship summary either separately, in a bulk delivery to clients, or as part of the delivery of information already provided by the firm.  The relationship summary can be delivered either electronically or in hardcopy.  If the relationship summary is delivered as a hardcopy in a package of documents, the relationship summary must be the first among any documents that are delivered at that time.  If delivered electronically, the relationship summary must be presented prominently and be easily accessible. The relationship summary must be delivered to clients within 30 days after the firm is first required to file it with the SEC.

Additionally, the FAQ clarifies that delivery of a relationship summary is not required for pooled investment vehicles, such as a hedge fund, private equity funds, and venture capital funds.

The FAQ also addresses formatting issues for the relationship summary.  The FAQ clarifies that a firm should only prepare one relationship summary, even if the firm offers multiple types of services to retail investors.  If a firm offers multiple types of services, the relationship summary should summarize all principal relationships and services offered to retail investors. This is also true for dually registered firms.  Furthermore, the FAQ gives instruction on how to create machine readable headings when completing the form.

The SEC expects to publish additional FAQs regarding Form CRS in the future.

The full FAQ can be found here

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, sec, crs delivery requirements, crs formatting, relationship summary

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