The Securities and Exchange Commission announced on January 28, 2026, a call for public comments on extending the collection of information associated with Form ADV-H. This form enables investment advisers to request exemptions from the requirement to file documents electronically through the Investment Adviser Registration Depository, or IARD. Published in the Federal Register, the notice aligns with the Paperwork Reduction Act of 1995, which mandates periodic reviews of such information collections to assess their necessity and burden. The move underscores ongoing efforts to balance regulatory efficiency with practical accommodations for advisers encountering filing obstacles. With a comment deadline of March 30, 2026, this development invites input from stakeholders on the form's utility and potential improvements, potentially shaping how advisers navigate compliance in a digital era.
Background on Form ADV-H and Electronic Filing Requirements
Form ADV-H serves as the application for hardship exemptions under the Investment Advisers Act of 1940. The Advisers Act requires registered investment advisers and exempt reporting advisers to submit filings electronically via IARD, a system operated by the Financial Industry Regulatory Authority, or FINRA. This electronic mandate aims to streamline data collection and enhance transparency in the investment advisory industry. However, recognizing that not all advisers can comply due to technical or financial constraints, the SEC established hardship exemptions through rules like 203-3 and 204-4(e).
The form addresses two exemption types. Temporary hardship exemptions are available to both registered advisers and exempt reporting advisers facing unexpected technical issues. Advisers must submit Form ADV-H in paper format within one business day of a missed filing deadline, followed by the electronic submission within seven business days. Continuing hardship exemptions, limited to registered advisers that are small businesses, provide relief for up to one year if electronic filing proves excessively burdensome or costly. Applications for these must be filed at least ten business days before a deadline, with the SEC deciding within that period.
This framework traces back to amendments in the Advisers Act, particularly those emphasizing electronic reporting to improve regulatory oversight. For instance, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the scope of advisers required to register or report, heightening the need for flexible filing options.
Key Players and Regulatory Framework
The SEC acts as the primary regulator, overseeing the Advisers Act and managing IARD through a contract with FINRA. FINRA handles the operational side, receiving paper filings from advisers granted continuing exemptions. Investment advisers, numbering around 22,495 according to SEC estimates—including 16,404 registered and 6,091 exempt reporting advisers—are the main users. Small businesses, defined under SEC rules as those with limited assets under management, benefit most from continuing exemptions.
Legal precedents inform this process. Rule 203-3, codified at 17 CFR 275.203-3, outlines hardship criteria, drawing from broader SEC efforts to reduce paperwork burdens as required by the Paperwork Reduction Act. Past OMB approvals, such as the current control number 3235-0538, have validated the form's low burden. The notice cites no recent changes to the form itself, focusing instead on renewal to ensure continued access to exemptions.
Political forces play a subtle role. The emphasis on reducing regulatory burdens aligns with bipartisan initiatives, including those under the Trump administration's deregulatory agenda, though this notice stems from statutory mandates rather than executive action. Stakeholder groups, such as the Investment Adviser Association, often advocate for streamlined processes, while consumer protection advocates emphasize the importance of electronic filings for public access to adviser information.
Implications for Investment Advisers and Compliance
In the short term, the extension maintains stability for advisers reliant on exemptions. The SEC estimates only two annual responses, each taking about one hour, resulting in a total burden of two hours industry-wide. This minimal impact suggests the form effectively targets rare cases without widespread disruption. For example, an adviser experiencing a sudden system failure could avoid penalties by promptly filing Form ADV-H, ensuring compliance continuity.
Long-term implications involve the evolution of digital infrastructure. As technology advances, the need for hardship exemptions may diminish, potentially leading to stricter criteria or phase-outs. However, for rural or resource-limited advisers, these exemptions prevent undue exclusion from the market. Perspectives vary: industry representatives might argue for broader eligibility to ease compliance costs, estimated at negligible levels here but part of larger regulatory expenses. Regulators and investors, conversely, could prioritize electronic filings to facilitate data analysis and fraud detection, as seen in cases like the SEC's enforcement actions against non-compliant advisers.
The notice invites comments on practical utility, burden accuracy, and ways to enhance clarity, such as through automated tools. This feedback could refine the process, addressing any gaps in accessibility.
Potential Next Steps and Ongoing Debates
The comment period ends March 30, 2026, after which the SEC will review submissions and potentially issue a 30-day notice for further input. If approved by the Office of Management and Budget, the extension would preserve Form ADV-H's role in adviser regulation. Future challenges include adapting to emerging technologies, like AI-driven filing systems, which might reduce hardship claims. Debates persist on balancing innovation with inclusivity, ensuring small advisers are not disadvantaged in an increasingly digital landscape. Stakeholders will monitor how these exemptions evolve amid broader SEC priorities, such as enhancing market integrity.
