SEC requires funds to file Year 2000 forms
October 19, 1998
Investment company advisers have until Dec. 7 to file the first of two required new forms with the Securities and Exchange Commission on how prepared their computer systems are for the Year 2000. The second form is due by June 7, 1999. Advisers may not file forms more than two weeks before the deadlines.
The SEC rules, announced Oct. 2 and effective Nov. 13, require forms to be filed by SEC-registered investment advisers that either advise a registered investment company or manage at least $25 million in assets. The SEC estimates 6,500 of 7,500 SEC-registered advisers will need to complete the forms. The SEC expects it will take about four hours for advisers to fill out the forms.
Although all SEC-registered investment advisers need to fill out the first part, only SEC-registered advisers to investment companies have to complete the second part.
The SEC says it plans to use the new forms to identify advisers that pose risks to clients and shareholders. All questions on the adviser form are either fill-in-the-blank or multiple choice. In the first filing, the SEC wants information on: a Year 2000 compliance plan; resources and personnel earmarked for Year 2000 issues; systems that may be affected; the adviser's progress on Year 2000 issues; contingency plans; readiness of third parties and whether and how the adviser is considering Year 2000 preparedness of securities the adviser recommends to clients.
The second part poses similar questions, but relates to mutual funds that advisers supervise. It seeks information on whether the investment company's board of directors is apprised of Year 2000 efforts and whether a fund complex has communicated with other brokers and advisers it deals with about their preparedness.
Unlike transfer agent and broker-dealer forms, adviser forms do not require a special narrative.
The SEC says it will make completed adviser forms publicly available and will select data from the forms to publicize on its web site, www.sec.gov. It plans to mail the forms to advisers and make them available to be downloaded from its web site.
Completed forms require a signature and may not be faxed. Even though broker-dealers, banks or transfer agents that double as SEC-registered advisers may already have filed forms concerning the Year 2000 , they are not exempt.