Brochure Rule

Posted in Finance, Accounting and Economics Terms, Total Reads: 684

Definition: Brochure Rule

The Securities and Exchange Commission the "Commission" or commonly known as SEC regulates that an investment adviser, registered or to be registered according to section 403 of the Investment Advisor’s Act of 1940 requires to provide a full disclosure statement in written form to their current and prospective clients.

Following are the (general ) requirements:

• This can be a copy of the Part 2A of Form ADV or a document that contains the same information that is in Part 2A of Form ADV.

• Brochure Supplement Part 2B or a copy should be provided to the client containing information about the investment advice in which the adviser has direct contact with the clients or maintain discretion of the assets in case of no direct contact

• In case the investment adviser supports or partakes in a wrap fee account a copy of Part 2A appendix 1 is required.

• Any material alterations to be included in the Form ADV Part 2 of provided as a separate document.

• Disclose other information if required by the Administrator.

• This Brochure must comply with the instructions specified in the Form ADV part 2 about the language and format.

In general this statement of disclosure should include information pertaining to the advisor's business practices, their educational background, his/her services and fees, compensation from third parties or any broker-dealer affiliations. In the last 10 years any legal or disciplinary actions against the investment advisor in and any other financial restrictions that could hinder his/her ability to meet the client obligations.


Hence, this concludes the definition of Brochure Rule along with its overview.

Browse the definition and meaning of more terms similar to Brochure Rule. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary

Share this Page on:
Facebook ShareTweetShare on G+Share on Linkedin