Form CRS disclosures: SEC staff statement

SEC’s heightened focus on investor protections and “fair and balanced” disclosures clearly extends to compliance with Form CRS (i.e., client or customer relationship summary), which is intended to provide retail investors with greater transparency and comparability amongst individual investment advisors and broker-dealers through “balanced and objective descriptions” of firms’ services, fees, conflicts of interest, disciplinary history, and other information. These firms must anticipate greater scrutiny regarding their Form CRS disclosures by both regulators and investors as all parties become more familiar with the forms. Firms should also anticipate increased potential for regulatory compliance examinations conducted by the SEC’s Division of Examinations and FINRA, as appropriate, and should promptly review their relationship summaries for accuracy, completeness, and consistency with form instructions as highlighted by SEC staff.