February 8, 2023

Volume XIII, Number 39


February 08, 2023

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February 07, 2023

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February 06, 2023

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SEC Adopts Rules for Reporting Separately Managed Accounts on Form ADV and Revised Recordkeeping Rules

Amendments to Form ADV

Information Regarding Separately Managed Accounts

The SEC’s final amendments to Part 1A of Form ADV include items intended to collect more information about each adviser’s SMAs.[1] The amendments are intended to help the SEC make risk assessments with respect to SMAs and their investment advisers. The SEC defines a “separately managed account” as an advisory account that is not a pooled investment vehicle (i.e., a registered investment company, business development company or private fund[2]). Under the final amendments, Item 5.K.(1) was added to Item 5 of Part 1A, asking advisers if they have regulatory assets under management (“RAUM”) attributable to SMAs. If so, the adviser is required to complete additional questions in Item 5.K. of Part 1A and accompanying disclosure in Schedule D.

To read the full alert, click here.

[1] Neither the Proposing Release nor the Adopting Release clarified the question of whether the SEC considers a “fund of one” a separately managed account. The Adopting Release includes instructions in the text preceding Section 5.K.(1) and (2) to clarify that any RAUM reported in Item 5.D. with respect to investment companies, business development companies and other pooled investment vehicles should not be reported in Sections 5.K.(1) or (2) of Schedule D.

[2] Part 1A of Form ADV defines a “private fund” as “[a]n issuer that would be an investment company as defined in section 3 of the Investment Company Act of 1940 but for section 3(c)(1) or 3(c)(7) of that Act.” It is the same definition used in Form PF filed quarterly or annually by advisers to private funds.

Copyright 2023 K & L GatesNational Law Review, Volume VI, Number 291

About this Author

Beth Clark, Investment Management, Securities Attorney, KL Gates, Law Firm
Of Counsel

Ms. Clark is Of Counsel in K&L Gates’ Washington, D.C. office. She concentrates her practice in the investment management and securities areas where she advises participants in the financial services industry, including investment advisers, private fund managers, alternative investment vehicles and brokerage firms with respect to their obligations under international and U.S. federal securities laws, state laws and rules, self-regulatory organization rules (including the Securities and Exchange Commission, the Commodity Futures Trading Commission, the National...

Christopher J. Martini, Investment Management, Hedge Funds and Alternative Investments Attorney, KL Gates, Law firm

Christopher Martini is an associate in the firm’s Washington, D.C. office and a member of the Investment Management, Hedge Funds and Alternative Investments practice group.

Admitted only in New York 
Not admitted in D.C. / supervised by Stacy L. Fuller, member of D.C. Bar

Cary J. Meer, Investment Management and Hedge Fund Attorney, KL Gates, Law Firm

Ms. Meer is a partner in K&L Gates’ New York City and Washington, D.C. offices and a member of the Investment Management and Hedge Fund practice groups.

Ms. Meer structures private funds as limited liability companies, limited partnerships, offshore corporations, common trust funds and business trusts, and prepares disclosure documents and organizational documents for such entities. She also advises investment advisers, private fund managers and investment companies on compliance issues, including under the Investment Advisers Act of 1940...