The Form ADV 2B Deadline is Nigh. Should We Expect Dirty Laundry?
2B or not 2B? That’s no longer the question. Last December the SEC released final rule IA-3060, mandating new disclosure requirements for Investment Advisers, including the Part 2B, or “Brochure Supplement.” For most registered advisers, July 31 is the deadline for submitting that new disclosure.
The Brochure Supplement has been controversial. Its focus is not the firm, but the firm’s personnel. Intended to help “clients seeking to understand the background, particular conflicts and outside business activities of the individual providing investment advice to them,” the 2B would include certain biographical details of advisers, including professional and educational credentials — and any disciplinary history.
During the public comment period, those opposed to the rule tended to focus on the administrative burden it would place on firms. Yet one wonders if another source of anxiety about the rule, even if largely unspoken, may have been a motivating factor. Would the 2B wind up ushering skeletons from the closet? Would it threaten (or promise, depending on your perspective) to divulge details about an individual’s background they’d rather not make public? Would it be scintillating?
With the compliance deadline still six weeks away, we don’t have a full answer yet. But the early returns have begun to trickle in. Knowledge Mosaic subscribers can go to our ADV search page and access a spreadsheet that links (as of this writing) to about three dozen 2Bs. But in our next post, coming soon, we’ll tell you what we’ve found so far.