Form CRS Content and Delivery Timing

Who Must File and Deliver Form CRS?

• Every broker-dealer registered with the Securities and Exchange Commission (SEC) that offers services to a retail investor must prepare, file, and deliver a Form CRS relationship summary.
• Retail investor: a natural person, or the legal representative of a natural person, who seeks to receive or receives services primarily for personal, family, or household purposes.
• The firm files its current Form CRS electronically through Web CRD, the Central Registration Depository system, and must post it prominently on the firm's public website, if it has one, in a location and format that a retail investor can reach easily.

When Must Form CRS Be Delivered to a New or Prospective Retail Investor?

• Deliver the current Form CRS before or at the earliest of:
  • A recommendation of an account type, a securities transaction, or an investment strategy
  • Placing an order for the retail investor
  • Opening a brokerage account for the retail investor

When Must Form CRS Be Delivered Again to an Existing Customer?

• Deliver it again before or at the time the firm:
  • Opens a new or different account for the retail investor
  • Recommends a rollover of retirement assets into a new or existing account or investment
  • Recommends or provides a new brokerage service or investment that does not necessarily involve opening a new account and would not be held in an existing account

Exam Tip: Gotchas

• Form CRS delivery to an existing customer is not a one-time event. A new account, a rollover recommendation, or a new brokerage service each triggers delivery again, even for a customer who already received one.

What Other Delivery Obligations Apply?

• On a retail investor's request: deliver a current Form CRS within 30 days.
• After a material update: file the amended Form CRS within 30 days, and communicate the change to existing customers within 60 days of when the amendment was required, and without charge. The firm may do that by delivering the amended Form CRS, or by another disclosure that carries the change.

Does Delivering Form CRS Satisfy Any Other Disclosure Obligation?

• Delivering Form CRS does not relieve the firm of any other disclosure obligation arising under the federal securities laws and regulations, or under other laws or regulations, including the rules of a self-regulatory organization. A firm that has delivered a compliant Form CRS still must satisfy every other disclosure duty that attaches to its recommendations.

Exam Tip: Gotchas

• Delivering Form CRS does not satisfy the disclosure duty a firm owes under Regulation Best Interest, in whole or in part. The two are separate obligations under separate rules, and completing one does not complete, or partially complete, the other.

What Must Form CRS Contain?

• The relationship summary uses five standardized headings, in this order: Introduction; Relationships and Services; Fees, Costs, Conflicts, and Standard of Conduct; Disciplinary History; and Additional Information.
• Length is capped, not fixed: a standalone broker-dealer or investment adviser is limited to two pages; a dual registrant filing one combined summary is limited to four pages, or an equivalent length in electronic format. A firm may file shorter, as long as it still covers the required topics.
• Combining is the dual registrant's choice, not a duty. A firm registered as both may instead prepare two separate two-page summaries, one for each line of business. Both routes comply.

Exam Tip: Gotchas

• The page limit is a maximum, not a required length. A firm is not out of compliance for filing a shorter relationship summary as long as it still addresses every required topic.
• A dual registrant does not have to combine. Two separate two-page summaries and one combined four-page summary are both compliant, so an answer saying a dual registrant "must" file one four-page summary is wrong.
• "Retail investor" does not mean the same thing in every rule. For Form CRS it is a natural-person test, so a company can never be one.
• The communications rules define the term the opposite way, as anyone who is not an institutional investor. A small company is a retail investor there. Check which rule the question is about first.

What Should You Check on Exam Day?

• Match the delivery trigger to the customer type: earliest of a recommendation, an order, or account opening for a new or prospective investor; opening a new account, a rollover recommendation, or a new brokerage service for an existing customer.
• Confirm the 30-day window applies to a request-based delivery and to filing an amended Form CRS, while existing customers get 60 days to be notified of a material update, free of charge.
• Count all five content headings in their required order before scoring an answer that names fewer.
• Never credit Form CRS delivery as satisfying part of a firm's Regulation Best Interest disclosure duty; the two obligations stand apart.