UPDATE: Form CRS Acknowledgement Requirements

August 4, 2020    Compliance & Licensing, Operations

Field Notice 2020-27
Field Notice 2020-23: Form CRS Acknowledgement, issued on 6/23/2020, discusses the instances when the new Acknowledgement of Form CRS Delivery is required.

Upon further review of this process, to ensure all clients receive the Form CRS (Client Relationship Summary), the Acknowledgement of Form CRS Delivery (“Acknowledgement”) is required to be completed every time you deliver the Form CRS.

When Form CRS is Required
For new customers:

  1. For new brokerage and direct business customers, the Form CRS (Client Relationship Summary) must be delivered prior to or at the time of:
  2. Opening an account or changing the broker/dealer on a direct business account;
  3. Recommending an account type, securities transaction, or investment strategy that involves securities (e.g.: recommending a customer open a brokerage account, or purchase a specific security or variable product), or
  4. Placing an order for the retail investor. 
  5. For new advisory clients, the Form CRS must be delivered prior to or at the time of entering into an advisory contract with the investor.
    1. Only required for co-advised (Illuminations, Directions, Morningstar, and SEI), not solicitor accounts.

For existing customers:
Reg BI specifies certain other instances which trigger subsequent delivery requirements.  Form CRS must be delivered to existing customers when you:

  1. Open a new account that is different from their existing account(s);
  2. Recommend a rollover from a qualified plan into a new or existing account;
  3. Recommend or provide a new brokerage or advisory service or investment that doesn’t necessarily involve the opening of a new account and would not be held in an existing account (e.g. ownership changes)

Evidence of Delivery
The Acknowledgement of Form CRS Delivery is attached after the Form CRS (Client Relationship Summary). The Acknowledgement is:

  • Signed by you certifying that you provided the Form CRS to the customer.
  • Completed every time you deliver the Form CRS to a customer.
  • Submitted with account paperwork.
  • Not signed by the client.

QUESTIONS
If you have any questions, please feel free to contact Operations at 800-344-7437.

TC116029(0820)