SEC Adopts Form CRS (Client Relationship Summary) for Advisers and Broker-Dealers

Ropes & Gray LLP

Ropes & Gray LLP

On a June 5, 2019, the SEC adopted Form CRS (“relationship summary”), along with new and amended rules and forms, to improve retail investors’ understanding of the different investment-related services provided by registered broker-dealers, registered investment advisers and dually registered firms (each, a “firm”).

At the same meeting, the SEC also adopted Regulation Best Interest and published two interpretive releases regarding (i) the standard of conduct for investment advisers under the Advisers Act and (ii) the “solely incidental” prong of the broker-dealer exclusion in the Advisers Act Section 202(a)(11)(C). Regulation Best Interest and the two interpretive releases are covered in separate Ropes & Gray Alerts.

The Form CRS rulemaking (the “CRS Release”) is described in detail below.


The CRS Release adopted Advisers Act Rule 204-5 and Exchange Act Rule 17a-14, which will require a firm to deliver to retail investors its current Form CRS. A firm that does not have any retail investors to whom the firm would be required to deliver a Form CRS is not required to prepare or to file a Form CRS.

In a Form CRS, a firm is required to describe the nature and scope of services provided by the firm, the types of fees customers will incur, the conflicts of interest faced by the firm, and the firm’s disciplinary history.

Form CRS has been streamlined compared to the form that the SEC proposed in 2018. A firm’s Form CRS cannot exceed two pages (or the equivalent, if provided in electronic format). If a dual registrant – i.e., a dually registered firm that offers services to retail investors as both a broker-dealer and an investment adviser – decides to provide a combined Form CRS, the combined form cannot exceed four pages.1

Firms must file their initial Form CRS and post their Form CRS prominently on their websites no later than June 30, 2020.

The Appendix to this Alert describes the mechanics of filing, delivering, amending and otherwise satisfying the legal requirements with respect to a firm’s Form CRS. This includes a summary of the required contents of the streamlined Form CRS.

Who is a Retail Investor?

The CRS Release defines “retail investor” as “a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, family or household purposes.” This definition is revised from the definition proposed by the SEC in 2018, which included “a trust or other similar entity that represents natural persons, even if another person is a trustee or managing agent of the trust.” The 2018 definition introduced some confusion among industry observers regarding the breadth of the definition, which could be read to include a private fund and its investors. The adopted definition, by narrowing the types of representatives (of natural persons) who can be deemed retail investors, reduces without eliminating this confusion. From the revisions to the definition and from the discussion in the CRS Release, it does not appear that the SEC intended to include private funds and their investors within the adopted definition of retail investor.

The CRS Release narrows the types of representatives who can be deemed retail investors by clarifying that a “legal representative” of a natural person, as used in the definition “retail investor,” includes only “non-professional” legal representatives, such as a non-professional trustee representing a natural person’s assets (as well as analogous representatives such as executors, conservators and persons holding a power of attorney for a natural person). The CRS Release states that the term “non-professional legal representative” is intended to include persons who are acting on behalf of a natural person and “who are not regulated financial services professionals retained . . . to exercise independent professional judgment.” Thus, natural persons who participate in a wrap fee program, where the investment adviser sponsor of the program exercises its independent judgment on behalf of the program’s participants, should be deemed retail investors only with respect to the investment adviser (and affiliated firms, if any) sponsoring the wrap fee program. On the other hand, a family office that is not required to register as an investment adviser by operation of Rule 202(a)(11)(G)-1 under the Advisers Act could be a retail investor. Other fact patterns may present greater uncertainty.

Consistent with the 2018 proposal, the adopted retail investor definition captures natural persons without regard to a natural person’s assets or net worth. The CRS Release states that “all individual investors would benefit from clear and succinct disclosure regarding key aspects of available brokerage and advisory relationships.” It follows that even an ultra-high net worth natural person can be a retail investor if the person is unrepresented or the person’s legal representative is a non-professional legal representative. This underscores that a natural person’s status as a retail investor may depend on the type of representative who stands between the investor and a firm. Consequently, for an institutional manager seeking to determine whether it has a Form CRS delivery obligation to a natural person who might be deemed a retail investor client, the analysis will focus on whether a regulated financial services professional exercising independent professional judgment stands between the institutional manager and the natural person.

With respect to participants in 401(k) plans and other workplace retirement plans,2 the CRS Release clarifies that the definition of retail investor includes a natural person who is seeking to select or retain a firm for brokerage or advisory services for the person’s workplace retirement account (this includes but is not limited to IRAs and individual accounts in workplace retirement plans). However, according to the CRS Release, participants in 401(k) plans and other workplace retirement plans are not retail investors for purposes of a Form CRS delivery obligation when participants are making ordinary plan elections that do not involve seeking to select or retain a firm for brokerage or advisory services.


  1. Narrowing “Retail Investor” Definition. A firm that does not have any retail investors to whom the firm would be required to deliver a Form CRS is not required to prepare or to file a Form CRS. Therefore, we expect that many of our clients that are registered investment advisers to institutional separate accounts, private funds and registered funds will be able to interpret the revised definition of “retail investor” to avoid Form CRS entirely.

  2. Disclosure Streamlining. To its credit, the SEC recognized that the SEC website is a better place for the abundance of educational and scripted disclosure that the SEC proposed in 2018. Therefore, the new requirement in Form CRS – to include an introductory paragraph with a link to the SEC’s investor education website – also is a commendable change.

    In turn, this approach allows for a streamlined, two-page Form CRS that relies more heavily on layered disclosure and a notice-and-access electronic delivery regime. It follows that Form CRS is consistent with other SEC disclosure initiatives and appears to suit retail investors’ preferences.3

    Some caution is justified regarding the ultimate utility of Form CRS. In this vein, the CRS Release stated that “to help ensure that [Form CRS] fulfills its intended purpose, we have directed our staff to review a sample of relationship summaries that are filed with the Commission beginning after June 30, 2020 . . . and to provide the Commission with the results of this review.” The staff’s conclusions will be of interest to confirm or improve Form CRS’s utility.

  3. Guidance Relevant to Form ADV. The CRS Release provides some useful guidance to investment advisers required to make an off-cycle amendment to a Form ADV. Form ADV’s instructions require an investment adviser to amend Part 1A, 1B, 2A and 2B (as applicable) of its Form ADV “promptly” upon the occurrence of certain specified events, but the SEC has never provided guidance regarding the meaning of “promptly.” An investment adviser’s Form CRS is required to be filed (as new Part 3 of its Form ADV) by the Investment Adviser Registration Depository (“IARD”) (as it files its Form ADV Parts 1A and 2A).

    The CRS Release provides that an investment adviser is required to amend and file its Form CRS within 30 days whenever any information in the Form CRS “becomes materially inaccurate,” by filing the amendment with the SEC by IARD. Discussing the 30-day period, in the CRS Release, the SEC stated that, “[b]ased on our experience with other similar filings, we believe the proposed [30-day] approach is consistent with the current requirements for investment advisers to update the Form ADV Part 2A brochure.” This is a helpful express statement about the SEC’s expectations regarding the timing of an amendment to a now-in-force Form ADV that is required to be made “promptly.”

* * *

The Appendix to this Alert describes the mechanics of filing, delivering, amending and otherwise satisfying the legal requirements with respect to a firm’s Form CRS. This includes a summary of the required contents of the streamlined Form CRS.

  1. Dual registrants also have the flexibility to prepare separate Forms CRS, neither exceeding two pages, for its brokerage services and for its investment advisory services. Affiliated broker-dealer and investment adviser firms have the same flexibility to prepare a single combined Form CRS of up to four pages.
  2. The CRS Release clarifies that workplace retirement plans also include “any arrangement available at a workplace that provides retirement benefits or allows saving for retirement, including, for example, any 401(k) plan or other plan that meets requirements for qualification under [IRC] section 401(a), deferred compensation plans of state and local governments and tax-exempt organizations described by Code section 457, and annuity contracts and custodial accounts described by [IRC] section 403(b).”
  3. See e.g., Securities Act Rule 498 (layered disclosure); 1940 Act Rule 30e-3 (notice-and-access electronic delivery).

Written by:

Ropes & Gray LLP

Ropes & Gray LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.