On June 10, 2020 the State of Rhode Island’s Securities Division announced that investment adviser firms registered with the State of Rhode Island must file the Form ADV Part 3/Form CRS relationship summary before June 30, 2020. Click here to read Rhode Island’s Notice to Investment Advisers RE: Form CRS. This is significant because Rhode Island is now the second state securities regulator to require the filing of the Form ADV Part 3/Form CRS by a state-registered investment adviser firm. Previously, to the best of our knowledge, only the Oklahoma Department of Securities and SEC registered investment adviser firms with retail investors were required to file the Form ADV 3/Form CRS. (Regulatory Update: On June 19, 2020, the Oklahoma Department of Securities withdrew (effective immediately) its notice requiring investment adviser firms registered with Oklahoma to file the Form ADV Part 3/Form CRS.)
It is the understanding of RIA Compliance Consultants that this new Form ADV Part 3/Form CRS requirement applies to all investment adviser firms state registered with the Rhode Island Securities Division (even if the investment adviser firm is domiciled outside of Rhode Island).
Rhode Island ADV 3 Filing and Delivery Requirements
Rhode Island-registered investment adviser firms are directed to file the Form ADV Part 3/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. The functionality of the IARD through which SEC-registered investment advisers are to file the Form CRS does not give access to state-registered investment advisers to file such form in the same way unless they are dually registered.
Although the Rhode Island Securities Division is not explicitly requiring the delivery of the Form ADV Part 3/Form CRS to investment advisory clients this notice states, “It would be a best practice for Rhode Island registered investment advisers to deliver the Form CRS within 30 days of a firm filing its Form CRS.”
Form ADV Part 3 FAQs
To help investment adviser firms understand what will be required by the Form ADV Part 3/Form CRS relationship summary, RIA Compliance Consultants created a webpage, Form ADV Part 3 FAQs. The page features 30 questions with detailed answers about the requirements for the Form CRS Relationship Summary/ADV Part 3. We encourage all Rhode Island, Oklahoma, and SEC registered investment adviser firms to view these FAQs.
To further assist investment advisers you can watch our recorded webinar “Form ADV Part 3 Drafting Tips.” We made these resources freely available to help investment advisers understand the importance of the of the Form ADV Part 3/CRS. RIA Compliance Consultants also invites you to read and continue to monitor our blog page where we will continue to provide investment advisers information about the Form CRS Relationship Summary/ADV Part 3. Click here to read our initial post providing investment advisers a brief summary about the new requirements for the Form ADV Part 3/Form CRS relationship summary.
Click here to purchase our Form ADV Part 3 Drafting & Filing Service.
If your investment adviser firm is an existing client of RIA Compliance Consultants and has questions about the Form ADV Part 3/Form CRS relationship summary, we encourage you to speak with your compliance consultant or, if you are not an existing client of RIA Compliance Consultants, click here to set up an introductory call with one of our Senior Compliance Consultants.
Posted by Grant Parr