Are you ready for annual amendments?

We only have two months left of 2025, and while there has been a slowdown from the SEC due to government shutdowns occurring at the end of September, there is still plenty you and your firm need to be doing in order to prepare for 2026.

One of the key deadlines coming up is annual amendments, and they are low-hanging fruit that can get you in a lot of trouble with the regulators if you don’t have the right processes in place to ensure you have filed them correctly.

KEY UPDATES:

– The SEC has issued conditional exemptive relief to help streamline and reduce the costs of operating the Consolidated Audit Trail (CAT). This measure allows self-regulatory organizations to lower expenses (forecasted to drop by $20–27 million in 2025) while maintaining essential regulatory oversight.

– The SEC has introduced a new one-stop webpage designed to support broker-dealers and market participants in transitioning to central clearing of U.S. Treasury securities. Following rule changes adopted in December 2023, the SEC extended compliance timelines to ensure a smooth and collaborative implementation process.

– The SEC has approved rule changes allowing three national securities exchanges to adopt generic listing standards for exchange-traded products (ETPs) that hold spot commodities, including digital assets. This means exchanges can now list and trade certain Commodity-Based Trust Shares without needing to go through the lengthy rule-change process each time.

My Take: These rule updates and exemptive reliefs mark an attempt from the SEC to take some of the pressure off finance industry professionals as we begin the new fiscal year. I will take this opportunity to remind you all that while these relief measures have been put in place, this is to ensure that compliance is reached before compliance deadlines hit. This is not an opportunity to hit the snooze button and ignore your procedures and processes.

SPOOKY SEASON MIGHT BE OVER, BUT THAT DOESN’T MEAN THE HORROR STORIES STOP!

To kick off season 3 of Regulate This! We brought all the dark and scary compliance ghouls out into the light in this episode as we discuss compliance horror stories from the RIA world.

Full of practical advice as well as compliance in content, this is an episode you won’t want to miss.

Ask Leila:

Question: What do firm owners often forget to update for their annual amendments?

Answer: It is easy to gloss over the ADV 2A brochure and not really look closely and read what is written. Oftentimes, once a closer examination is done, firm owners realize that the service descriptions may be out of date, conflicts of interests are out of date, risk factors incomplete, and custodial information wrong.  Looking at the ADV 2B, there may be OBAs that are missing or no longer applicable, designations missing or licenses that are no longer maintained. It is the simple stuff and it is easy to fix but often overlooked because firm owners are not reading their brochure closely. Many firm owners also do not reconcile the ADV Part 1 against the ADV Part 2 to ensure that responses are accurate, consistent and up to date. It feels like a pain to have to closely read your ADV docs, but take the time and make sure it is right.

Responsible Entrepreneurs

As annual amendment season approaches, now is the time for RIAs to take a close look at their disclosures. Your ADV filings, particularly Form ADV Part 1, are one of the most common places for errors and omissions to occur. Take this opportunity to review your cash and non-cash compensation arrangements, outside business activities (OBAs), and any affiliations that could create potential conflicts of interest. Ensure you have an up-to-date record of all employee OBAs and that any travel, accommodations, or meals provided by product sponsors or other entities are properly disclosed as non-cash compensation.

It’s also important to confirm that information shared between affiliated entities complies with laws governing personal identifiable information (PII). Even in family office-style structures where clients interact with a single entity, the legal documentation must support how client data is shared internally. The SEC continues to prioritise transparency and client protection, viewing failures to disclose as potential client harm because they limit informed decision-making.

Quarter 1 can get busy with new hires, new services, and operational updates. Taking the time now to review and clean up your disclosures will help your firm stay compliant, transparent, and client-focused in the year ahead