The Form ADV annual updating amendment

Every registered investment adviser must file an annual updating amendment to Form ADV within 90 days after the end of its fiscal year. For a firm with a December 31 fiscal year end, that is March 31 (March 30 in a leap year). The filing re-answers every item in Part 1A, updates the Part 2A brochure, and starts a second clock: 120 days from fiscal year end to deliver the brochure, or a summary of material changes, to clients.

The obligation comes from Rule 204-1(a)(1), which requires an adviser to amend Parts 1 and 2 "at least annually, within 90 days of the end of your fiscal year," and more often where the Form ADV instructions require it. The instructions are where most of the detail lives, so this guide quotes them directly.

Who has to file

• SEC-registered advisers. Rule 204-1 and General Instruction 4 to Form ADV.
• State-registered advisers. General Instruction 4 applies the same 90-day annual updating amendment to advisers registered with a state securities authority. They also update Part 1B and file their brochure supplements with the states. Check your state for anything it adds.
• Exempt reporting advisers. Advisers relying on the venture capital exemption in Section 203(l) or the private fund adviser exemption in Section 203(m) also file an annual updating amendment within 90 days of fiscal year end, covering the items they are required to complete.

What the annual amendment covers

General Instruction 4 says that when you submit the annual updating amendment "you must update your responses to all items in Part 1A, 1B, 2A and 2B (as applicable)," including Schedules A, B, C and D and every section of Schedule R for each relying adviser. In practice that means:

1. Part 1A, all of it. Including the items you do not have to touch between annual filings: Item 5 (your advisory business, including regulatory assets under management), Items 6 and 7 (other business activities and financial industry affiliations, with private fund reporting), and Item 12 for smaller advisers.
2. Regulatory assets under management (Item 5.F). Part 1A Instruction 5.b says to use the current market value of the assets "as determined within 90 days prior to the date of filing this Form ADV," using the same method you use to report account values to clients or calculate fees.
3. SEC eligibility (Item 2.A). Item 2.A is completed only on an application or an annual updating amendment, so this is the filing in which you confirm the basis for staying registered with the SEC.
4. The Part 2A brochure, with a summary of material changes if there are any (see below).
5. Part 2B brochure supplements. SEC-registered advisers do not file supplements, but they must review them and keep copies under Rule 204-2(a)(14).
6. Part 3 (Form CRS) is optional here. The instructions say you "may, but are not required, to" include an amended relationship summary in the annual amendment. Form CRS runs on its own 30-day clock when it becomes materially inaccurate. See the Form CRS guide.

An IARD filing fee is due with each annual updating amendment. There is no fee for an other-than-annual amendment (General Instruction 16). A filing is not accepted, and so not filed, until the fee is paid (Rule 204-1(c)).

The summary of material changes

Item 2 of Part 2A requires a summary of material changes when the brochure has changed materially since the last annual update. It goes on the cover page, on the page immediately after it, or in a separate document. It must say that it discusses only material changes since the last annual update and must give the date of that update.

If the summary is a separate document, it has to be filed as an exhibit to the brochure, uploaded together with it in a single text-searchable PDF (Part 2A Instruction 6, and the note to Rule 204-1).

If nothing in the brochure became materially inaccurate and you filed no interim amendment making material changes during the year, you do not need a summary of material changes. In that case you also do not have to deliver a brochure or summary to existing clients that year (Part 2A Instruction 5). State-registered advisers should check whether their state still expects an annual offer.

Delivery: the 120-day clock

Rule 204-3(b)(2) requires an SEC-registered adviser, if there are material changes since the last annual updating amendment, to deliver to each client within 120 days after fiscal year end, without charge, either:

• the current brochure, or
• the summary of material changes, with an offer to provide the current brochure free of charge, a website address (if any), an e-mail address (if any) and a telephone number for obtaining it, and the website address for the Investment Adviser Public Disclosure system.

For a December 31 fiscal year end, 120 days is April 30 (April 29 in a leap year). The filing deadline and the delivery deadline are 30 days apart, so put them on the calendar as two separate items.

Rule 204-2(a)(14)(i) requires a record of the dates each brochure, supplement and summary of material changes was given to each client. A delivery you cannot evidence is a books and records finding as well as a brochure one.

Other-than-annual amendments

The annual filing is a floor. Between annual amendments, General Instruction 4 requires an SEC- or state-registered adviser to file an amendment promptly if:

• any information in Items 1 (except 1.O and Section 1.F of Schedule D), 3, 9 (except 9.A.(2), 9.B.(2), 9.E and 9.F) or 11 of Part 1A becomes inaccurate in any way. These cover identifying information, form of organization, custody and disciplinary information.
• information in Items 4, 8 or 10 of Part 1A (successions, participation or interest in client transactions, and control persons) becomes materially inaccurate.
• information in the brochure becomes materially inaccurate.
• you add or remove a relying adviser under an umbrella registration.

Some items never trigger an interim amendment. You do not have to update Items 2, 5, 6, 7, 9.A.(2), 9.B.(2), 9.E, 9.F or 12 of Part 1A between annual amendments, even if the answers have changed. Assets under management growing or shrinking during the year is therefore not, on its own, a reason to amend.

The brochure has a similar carve-out. You do not need an interim amendment solely because client assets you manage (Item 4.E) or your fee schedule (Item 5.A) changed. If you are amending the brochure for another reason and those figures have become materially inaccurate, update them at the same time.

Brochure supplements must be amended promptly whenever information in them becomes materially inaccurate.

Disciplinary changes are delivered, not just filed. Rule 204-3(b)(4) requires prompt delivery to clients of an amended brochure or supplement (or a statement of the material facts) when an amendment adds or materially revises disciplinary information under Item 9 of Part 2A or Item 3 of Part 2B. Do not hold it for the next annual mailing.

The instructions are blunt about the consequence: failure to update Form ADV as required "is a violation of SEC rules or similar state rules and could lead to your registration being revoked."

When the annual amendment changes your registration

The annual amendment is also where eligibility for SEC registration is tested.

• Moving to the SEC. A state-registered adviser whose annual amendment reports that it is eligible for SEC registration must apply to the SEC within 90 days of filing that amendment (Rule 203A-1(b)(1)). Under Part 1A Instruction 2.a, an adviser may register at $100 million of regulatory assets under management and must apply once it reaches $110 million.
• Moving to the states. An SEC-registered adviser that checks Item 2.A.(13) because it is no longer eligible must file Form ADV-W within 180 days of fiscal year end (Rule 203A-1(b)(2)). An SEC-registered adviser may stay registered while regulatory assets under management remain at $90 million or more.
• Exempt reporting advisers that report private fund assets of $150 million or more under Rule 203(m)-1 generally have up to 90 days after filing the annual amendment to apply for SEC registration, if they have complied with their reporting obligations (General Instruction 15).

A working timeline for a December 31 year end

1. January: collect the year's changes. Ownership, personnel, custody arrangements, disciplinary events, new services, fee changes, affiliates, private funds.
2. Early February: calculate regulatory assets under management from values dated within 90 days of the planned filing date.
3. February: redline the brochure, draft the summary of material changes, and review every supplement.
4. Early March: a second person reviews Part 1A against the firm's own records. Fund the IARD account.
5. By March 31: file. Keep the filed version and the working papers.
6. By April 30: deliver the brochure or summary to every client, and record who received it, when and how.

What examiners look for

The library's note on Rule 204-1 lists the most common problems, and the Division of Examinations' 2023 observations on newly registered advisers (Risk Alert, March 27, 2023) describe "untimely filings (i.e., material or annual form updates were not made within prescribed timeframes or at all)." Typical findings:

• Item 5 figures that no longer match the firm's own records.
• Interim triggers missed because nobody re-read the instructions.
• A brochure on the website that differs from the one on file.
• The annual offer described in the policy but never sent, or sent with no record of when or to whom.
• New disciplinary disclosure held until the next annual mailing.

Common questions

When is the Form ADV annual amendment due?

Within 90 days after the end of your fiscal year (Rule 204-1(a)(1)). For a December 31 fiscal year end, that is March 31, or March 30 in a leap year.

Do I have to update Form CRS in the annual amendment?

No. You may include an amended Form CRS in the annual amendment, but it is not required. Form CRS must be amended within 30 days whenever it becomes materially inaccurate, whenever that happens.

Do I have to send clients my brochure every year?

Only if there are material changes since the last annual update. If there are, deliver the updated brochure or a summary of material changes with an offer of the brochure within 120 days of fiscal year end (Rule 204-3(b)(2)).

Does a change in AUM require an interim Form ADV amendment?

No. Item 5 is updated annually, and the brochure does not need an interim amendment solely because client assets or the fee schedule changed. If you amend the brochure for another reason, update those figures if they have become materially inaccurate.

What happens if I miss the 90-day deadline?

Failure to update Form ADV as required is a violation of SEC rules (or similar state rules) and can lead to revocation of registration. File as soon as you can, and record the cause and the fix in your compliance records.

Keep both deadlines in view

Luna's compliance calendar seeds the obligations that fit your registration type, generates next year's instance of each annual one, and reminds the person it is assigned to before it is due. The regulatory filings template sets out who prepares, reviews and files each part of Form ADV, and the books and records template covers the delivery records Rule 204-2(a)(14) requires.