An ADV form is used when investment advisers need to register with the Securities and Exchange Commission (SEC) or state securities commissions. If amendments need to be made to existing registrations, this form also will be used. There are two versions of the ADV form. One is a paper version and the other is an electronic version.
The ADV form has three parts. The first part attempts to identify the entity that is filing the application. In some cases this is an individual; in other cases, this will be a business.
In addition to information about the applying entity, questions also will be asked about entities that control or exercise authority over the operations of the applicant. The first part of the ADV form contains numerous schedules. These ask for information about direct owners, indirect owners, and disciplinary actions of both the applicant and any affiliates.
The next section of the form, Part 1B, collects information required by state authorities. Not everyone will be required to fill in this portion. It is only necessary when an entity wishes to register with state authorities.
The third section, known as Part II, requests the brochure of the applying entity. Typically, the applying entity should file the current brochure when it is required. Those who already are SEC-registered are not required to file this part of the application with the SEC. They simply are required to keep the amendments on file in case they are requested. State rules can vary.
The ADV form must be updated every year. This should be done within 90 days of the end of the fiscal year. There is certain information that promptly must be amended in the event of changes.
Every application must include an Execution page. There are three possible Execution pages. One is used for United States (U.S.) residents. Another is used for non-U.S. residents. The third is needed when registering with state authorities.
Electronic ADV forms are submitted through the Investment Adviser Registration Depository (IARD) which is sponsored by the SEC. In order to access this system, an applicant must make a request using the FINRA Entitlement system. Both Websites are username and password protected.
Submission of an ADV form generally involves fees. It is not only important for the applicant to complete the form entirely and correctly; it also is important for the applicant to include the required payment. If any of these things are not completed, it is likely that the application will not be processed.
