SEC Disclosures Guide: Umbrella Registration



We at Shearman & Sterling were pleased to have the opportunity to present our thoughts on “SEC Public Disclosures - A Guide for Investment Advisers” at the MyComplianceOffice Webinar on October 13. We had an enthusiastic crowd and some lively exchanges. We’d like to summarize the main points of our presentation here in a five-part series.

Yesterday we summarized the principal SMA disclosure requirements. Today we summarized the principal SMA disclosure requirements, today we proceed to examine the new “Umbrella Registration” provision.

The SEC has revised the Instructions to Form ADV for the purpose of codifying past no-action relief which permitted multiple affiliated RIAs to register and report on a single ADV filing—so-called “Umbrella Registration”.  Here are the rules:

1) One RIA (the “Filing Adviser”) may file on Form ADV. The principal office and place of business of the Filing Adviser must be located in the United States.

2) Other RIAs identified by the Filing Adviser (“Relying Advisers”) may rely on the filing made by the Filing Adviser, in lieu of making a separate filing on Form ADV. Relying Advisers and their employees and persons acting on their behalf must be subject to the Filing Adviser’s supervision and control

3) All of the identification data for the Relying Advisers will be provided on new Schedule R to Form ADV. The advisory activities of the Relying Advisers, as well as those of the Filing Adviser, will be subject to examination by the SEC.

4) Eligibility for Umbrella Registration is limited to RIAs whose advisory clients are limited to private funds and to SMA clients who are qualified clients and are otherwise eligible to invest in the private funds and whose investment objectives and strategies parallel the private funds’.

5) RIAs participating in an Umbrella Registration are required to operate under a single Compliance Policy and a single Code of Ethics, each of which is administered by a single chief compliance officer.

This is the second post in our five-part series entitled “SEC Public Disclosures - A Guide for Investment advisers". Click here to view part 3, "Enhanced Identification Process". Alternatively you can download the full report here