Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. Print
March 03, 2008 12:00 AM

Fulfilling disclosure

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Anytime the Securities and Exchange Commission enhances disclosure requirements ought to be a cause for celebration by investors, who rely on the information to make risk-appropriate investment decisions.

    Unfortunately, the SEC has been tardy in improving disclosure of vital information about securities firms. Now it is making changes, but incrementally and unacceptably slowly.

    It has announced plans to enhance disclosure, and make accessible online, two important sources of information pertaining to investment advisers.

    One is Part 2 of the ADV form for the registration of investment advisers. The ADV Part 2 currently is available only in paper form. Asset advisers are required to provide Part 2 to clients, but there is no requirement for managers to provide annual amendments to Part 2 unless the clients request it. And don't try to look up Part 2 amendments in SEC filings, because the SEC doesn't require them.

    The second involves the applications and orders for exemptions money managers seek from the Investment Advisers Act and the Investment Company Act.

    These proposals deserve a cheer. But they should leave investors scratching their heads: What took so long to put online the ADV Part 2 and the exemption applications? ADV Part I was put online in 2001.

    The ADV Part 2 should have been put online soon after Part I was put up, not seven years later.

    And why hadn't the SEC put the exemption applications online long before this? They provide the detail and reasoning for the exemption sought. Had they been posted sooner, they might have provided important insight into the practices of the investment advisers and mutual funds involved in market-timing and other scandals in recent years.

    The trouble is the SEC has over the years gone from being a regulator that is supposed to collect information useful to investors and make it available to them to a regulator collecting information that it keeps from investors.

    Many forms are incomprehensible in detail, without underscoring, or even providing, the significant information, such as conflicts of interest and soft-dollar practices.

    As for accessibility, the Internet is not a new medium, as the SEC knows well with its existing use of it. But for some important regulatory forms, the SEC stays with an antiquated paper format.

    Form BD for registration of brokers and dealers, a disclosure document similar to the ADV for registered investment advisers, also is not online.

    Whatever value this information might have is essentially hidden from investors, unless they gain access to the paper document in an SEC office.

    If these forms had been made available online sooner, investors might have given the SEC valuable feedback for making the content more useful.

    The SEC has yet to issue its proposal for revising ADV Part 2, stating only that it will be released as soon as possible. The proposal should make the entire ADV, including Part 1, more user friendly. For example, the current form gives no date for the reported assets under management.

    Unlike corporate filings, ADVs aren't archived online, so investors can't see how assets under management have changed over the years.

    The SEC ought to at least include such historical ADV data in each amended form. The assets under management numbers, which often are in the billions, are even hard to discern, because the SEC form has no offsetting commas for increments of thousands.

    The form is annoyingly bureaucratic and indecisive: Page 1 asks if the firm has a website, and then instead of having the address placed right there, makes the reader go deep into the ADV pages to find the address.

    One reason for the slow placement of these documents online is probably that Congress has routinely rejected SEC requests for more money, some of which might have been used to put these documents online.

    Nevertheless, the SEC must now make greater efforts to provide the information investors needs in a timely and easily accessible manner.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    Outlook 2023: Opportunity in a volatile world
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing