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Vedder Thinking | Articles SEC Staff Statement Highlights Need for Form CRS Disclosure Improvements


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On December 17, 2021, the SEC’s Standards of Conduct Implementation Committee issued a statement summarizing its observations following a review of Form CRS relationship summaries filed with the SEC by a cross-section of broker-dealers and investment advisers and the firms’ compliance with Form CRS requirements. 

The Committee’s observations identified various problematic disclosures and/or disclosure practices, including the following:

  • Use of Technical Language and/or Inclusion of Disclaimers or Other Impermissible Disclosures. Some firms used legal jargon and/or highly technical business terms without providing clear explanations. The staff also observed some relationship summaries that included impermissible disclaimers and hedging language.
  • Omission or Modification of Required Information. Certain firms omitted or modified required disclosures, such as headers, prescribed language or conversation starters—in certain instances in apparent reliance on the proposed instructions to Form CRS rather than the adopted final instructions.
  • Shortcomings in Descriptions of Relationships and Services; Fees, Costs, Conflicts and Standards of Conduct. Some relationship summaries failed to adequately describe substantive topics required to be addressed by the form, including monitoring retail investors’ investments, the scope of a firm’s investment authority, limitations on investment offerings, principal fees and costs, wrap fee program offerings and fees, firm and financial professional compensation arrangements and conflicts of interest.
  • Modification and/or Supplementation of the Disciplinary History Disclosure. In some relationship summaries, firms omitted or modified the heading or the conversation starters and/or provided extraneous language explaining their response (beyond the permissible yes or no response) to the required disciplinary history disclosure.
  • Issues with Prominently Displaying Relationship Summaries on Firm Websites. In some instances, the staff was unable to locate a relationship summary on a firm’s website or was able to locate the relationship summary only after an extensive search of the firm’s website.
  • Use of Marketing Language and/or Vague and Imprecise Boilerplate Explanations. The staff reviewed some relationship summaries that included marketing language, touted firms’ abilities, or used superlatives or similar descriptors. In addition, the staff observed disclosures in some relationship summaries that did not appear to be tailored to the particular firm’s services, fees, relationships or conflicts.

The SEC staff encourages firms to familiarize themselves with the specific requirements of Form CRS by reviewing the Form CRS adopting release, the Small Entity Compliance Guide (as applicable) and the staff’s Frequently Asked Questions on Form CRS. Additionally, firms can submit interpretive questions to

The Committee’s statement is available here.


John S. Marten


Nathaniel Segal


Jacob C. Tiedt


Christina V. West