Welcome to the May 2, 2025 edition of On The Docket, which includes the following content:
- Latest news in the FinCEN beneficial ownership information reporting saga
- SEC staff reductions, office closures, and leadership changes
- PSA for anyone using a virtual meeting transcription service that auto-joins all meetings and emails the transcription to all attendees
- A note for the SEC-registered advisers that are now below $90M in AUM due to the recent market dip
- House Financial Services Committee urges SEC withdrawal of 14 proposed and final rules
- Form CRS redelivery triggers
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Happy reading.
– Chris
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Latest news in the FinCEN beneficial ownership information reporting saga
I’m so sick of posting updates about the !@#$% FinCEN Beneficial Ownership Information reporting rule, but hopefully this will be the last one for a while (or forever):
All U.S. companies and U.S persons are now exempt from FinCEN BOI filing obligations, as the requirement now only applies to entities that are formed under the laws of a foreign country.
Good riddance.
SEC staff reductions, office closures, and leadership changes
Reuters pegs SEC staff voluntary departures (i.e. buyouts) at about 12% – or 500 to 700 staffers; additional forthcoming involuntary departures are TBD.
Leases on the SEC’s Philadelphia and Los Angeles regional offices are also set to terminate (and potentially the Chicago regional office as well).
The authority to issue formal orders of investigation delegated to the SEC’s Director of the Division of Enforcement was recently revoked, such that formal orders of investigation must now go through the Commissioners themselves.
On April 9th, appointee (and previous SEC Commissioner) Paul Atkins was approved as the next SEC chair. During his Senate Banking Committee hearing, he had the following to say:
“The current regulatory environment for our financial system inhibits investment and too often punishes success. Unclear, overly politicized, complicated, and burdensome regulations are stifling capital formation, while American investors are flooded with disclosures that do the opposite of helping them understand the true risks of an investment. It is time to reset priorities and return common sense to the SEC.
I am eager to get to work for American markets and investors. Should I be confirmed, my goal will be to ensure that the United States is the best and most secure place in the world to do business and for Americans to invest their hard-earned dollars to save and provide for their future. I will strive to protect investors from fraud, to keep politics out of how our securities laws and regulations are applied, and to advance clear rules of the road that encourage investment in our economy to the benefit of all Americans.”
Suffice to say, 2025 is and will continue to be an interesting year for the SEC.
PSA for anyone using a virtual meeting transcription service that auto-joins all meetings and emails the transcription to all attendees
Any pre-meeting ‘banter’ with your colleagues before the counterparty joins may also be transcribed and emailed to said counterparty.
Less-than-ideal example: Billy Bob and Charlene from Backwoods Advisors join a Zoom call, and the default-on transcription service joins in the background. While waiting for their perpetually-late client Joe to join, Billy Bob and Charlene use the dead time to discuss the financial plan of another client. After the meeting with Joe ends, the entire meeting’s transcription is auto-emailed to Joe… including the internal discussion between Billy Bob and Charlene about the other client’s financial plan.
Consider:
(a) changing transcription to default-off, forcing you to manually start transcription only after all attendees have joined and you’re ready to go ‘on the record,’
(b) changing attendee transcription auto-emails to default-off, forcing you to manually review the transcription before it’s sent to all attendees, and/or
(c) Sit with your colleagues in awkward silence before the counterparty joins, or at least limit your internal banter such that you don’t insult the yet-to-join counterparty, discuss other clients, divulge trade secrets, compare weekend beer consumption, etc. etc.
Beware the allure of unchecked convenience.
A note for the SEC-registered advisers that are now below $90M in AUM due to the recent market dip
There is one silver lining for SEC-registered advisers that are now below $90M in AUM due to the recent market dip, and worried they may have to transition to state registration:
You have until the time you file your 2026 annual ADV amendment to hit at least $90M in AUM to remain registered with the SEC. You can even dip to $1 in AUM during the year and remain registered with the SEC.
The only point in time that matters for purposes of assessing whether you must transition from SEC to state registration is when you file your annual ADV amendment each year.
And there’s even a further grace period: An SEC-registered adviser that reports less than $90M in AUM as part of its annual ADV amendment filing has 180 days from its fiscal year end (i.e., the end of June, assuming a 12/31 FYE) to achieve at least $90M in AUM and remain registered with the SEC.
This is all described in detail in my past article, “Switching Between State And SEC Registration: Evaluating Options (And Requirements) For RIAs Nearing $100 Million RAUM“
House Financial Services Committee urges SEC withdrawal of 14 proposed and final rules
Time will tell what proposed and final SEC rules may be withdrawn, but I think a lot of advisers would be happy if the ones highlighted in the screenshot below die on the vine (especially #13).
Notably not on the list:
- Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Customer Information. Final, effective 12/3/25 for larger entities and 6/3/26 for smaller entities.
- Customer Identification Programs for Registered Investment Advisers and Exempt Reporting Advisers {Proposed}
- Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers. Final, via FinCEN, effective 1/1/26.
Form CRS redelivery triggers
An adviser must redeliver Form CRS to an existing client before or at the time the adviser:
📨 Opens a new account that is different from the client’s existing account(s);
📨 Recommends that a client roll over assets from a retirement account to a new or existing account or investment; or
📨 Recommends or provides a new brokerage or investment advisory service.
These 3 redelivery requirements are unique to the Form CRS, and do not apply to any other part of Form ADV — which is why we often see them missed by advisers.
The challenge is that the Form CRS Instructions provide exactly zero helpful guidance for what constitutes a “different” account type, or a “new” brokerage or investment advisory service.
An adviser must instead look to the Form CRS Adopting Release and Form CRS FAQs to glean any further direction.
The Adopting Release suggests that the SEC is most concerned with conflicts that arise between brokerage accounts and advisory accounts, and ensuring an adviser “does not switch existing customers or clients into accounts or services without explaining or giving them the opportunity to consider other available options.” Yet this objective isn’t exactly helpful for advisers that are not also registered as or affiliated with broker-dealers.
By way of example only, the following inflection points will generally cause an adviser to redeliver its Form CRS to an existing client:
➡️ Opening an account with different or unique features from a client’s existing account(s) (e.g., an account to be used for margin, an account to be used for options trading, an unmanaged brokerage account to a managed advisory account, etc.)
➡️ Recommending a retirement plan to IRA rollover
➡️ Transitioning from a ‘financial planning only’ relationship to managing a client’s accounts for the first time
➡️ Transitioning from non-discretionary to discretionary management
➡️ A first-time recommendation or purchase of a private investment fund, structured product, direct-sold mutual fund, or variable annuity
To help keep track of when an adviser redelivers its Form CRS, we generally recommend maintaining a Form CRS redelivery log that specifies the redelivery trigger (or otherwise creating a Form CRS redelivery notation in the client’s file or CRM).