Form ADV Cybersecurity Risk Disclosure Requirements

To meet form adv cybersecurity risk disclosure requirements requirement, you must ensure your Form ADV Part 2A cybersecurity statements are accurate, not misleading, and kept current when facts change. Operationally, build a repeatable disclosure governance process that ties each disclosure sentence to an owned control, an evidence source, and an update trigger so marketing and client communications do not overstate your cyber posture.

Key takeaways:

• Treat Form ADV cyber disclosure as a controlled, evidence-backed claim set that must stay aligned to real practices and incident history.
• Put Legal/Compliance in the approval path for cybersecurity language that appears in Form ADV and any marketing “echo” of those claims.
• Maintain an incident and “significant change” decision log so you can prove when you evaluated whether updates were needed.

For SEC-registered investment advisers, cybersecurity language in Form ADV Part 2A is not “background narrative.” It functions as client-facing disclosure and, in practice, as marketing-adjacent content that must not be false or misleading. The operational challenge is that cybersecurity facts change faster than disclosure documents do: controls evolve, third parties change, incidents happen, and security teams adjust scope and terminology.

This requirement page translates the standard into an execution model you can run. The core is simple: every cybersecurity statement you publish must be (1) true today, (2) complete enough to not mislead a reasonable reader, and (3) updated when significant changes make prior language stale. The SEC has also signaled continued exam focus on Marketing Rule compliance, which increases the likelihood that exam teams scrutinize public-facing statements for accuracy and substantiation (2025-exam-priorities). Your fastest path to defensible compliance is to manage Form ADV cybersecurity disclosures like controlled claims: map them to controls, assign owners, retain evidence, and run an update cadence tied to incident and change triggers.

Regulatory text

Regulatory standard (excerpt): “It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act for any investment adviser to disseminate any advertisement that includes any untrue statement of a material fact, or that is otherwise false or misleading.” (17 CFR 275.206(4)-1)

Operator interpretation for Form ADV cybersecurity disclosures:
Even though the quoted text is the SEC’s Marketing Rule prohibition on false or misleading advertisements, the operational lesson carries directly into Form ADV cybersecurity disclosures because clients and prospects rely on them, and firms routinely reuse the same cybersecurity language across marketing decks, DDQs, websites, RFPs, and ADV brochures. If your ADV claims (explicitly or by implication) that you have cybersecurity policies, governance, testing, monitoring, incident response capabilities, or third-party oversight, you need evidence that those claims are true and not misleading in context (17 CFR 275.206(4)-1). Examiners have stated they will focus on compliance with recently adopted SEC rules including the Marketing Rule, so expect scrutiny of how you substantiate statements and manage updates (2025-exam-priorities).

Plain-English requirement

You must disclose cybersecurity risks, policies, and any material incidents in Form ADV Part 2A in a way that is accurate and not misleading, and you must update the brochure when significant changes occur. Practically, that means:

• Don’t overstate maturity (“we maintain robust monitoring” without defining scope and evidence).
• Don’t imply coverage you don’t have (“24/7 SOC” when you only have business-hours alerting).
• Don’t describe policies you haven’t adopted or implemented.
• Don’t let cyber language sit unchanged while controls, third parties, or incidents make it stale.

Who it applies to

Entities: SEC-registered investment advisers (RIAs) preparing and delivering Form ADV Part 2A brochures. (17 CFR 275.206(4)-1)
Operational contexts where this breaks most often:

• The security program is real, but marketing/compliance copy is aspirational or outdated.
• Security practices exist informally, but are not documented, owned, or consistently performed.
• A cyber incident occurs, and the firm cannot show a documented decision about whether the brochure needed updating.
• Multiple documents diverge: ADV says one thing, DDQ says another, website says a third.

What you actually need to do (step-by-step)

1) Build a “cyber disclosure claim inventory”

Create a line-by-line list of every cybersecurity-related statement in Form ADV Part 2A, including implied claims. Examples of implied claims:

• “We maintain policies and procedures designed to protect client information” implies you have written policies, a review cadence, and operational execution.
• “We conduct periodic testing” implies testing exists, has scope, produces results, and drives remediation.

Deliverable: A claim inventory table with: Statement | Location (Item/section) | Claim type (risk disclosure / control description / incident statement) | Owner | Evidence pointer | Last validated date.

2) Map each claim to real controls and owners

For each statement, map to the control that makes it true and name the accountable owner. Your goal is “provable truth,” not “reasonable intent.”

Minimum recommended control mapping (tie directly to your disclosures):

• Cybersecurity governance standard mapped to disclosed practices, with named control owners and review cadence (aligns statements to reality).
• Incident triage and disclosure-decision logs, including Legal/Compliance sign-off and evidence retention (proves how you evaluated updates).
• Periodic control validation (tabletop or targeted testing) and remediation tracking to closure (substantiates “testing” and continuous improvement claims).

If you use a framework, map controls to it for internal clarity (no extra SEC credit, but it prevents gaps). Common internal mappings include NIST CSF and ISO 27001 control families. Use the framework as your control taxonomy, not as a disclosure substitute.

3) Implement a disclosure approval workflow (with evidence gates)

Put a lightweight but strict workflow in place:

1. Draft/refresh cyber disclosures (Compliance owns the document; Security provides facts).
2. Evidence check: for each claim, attach or link the substantiation (policy, ticket report, test result, vendor SOC review record, IR plan).
3. Materially misleading review: Legal/CCO reviews for overbroad language, absolutes, and unqualified assurances.
4. Sign-off: Security lead + CCO sign.
5. Publish + archive: retain final brochure, redlines, approvals, and evidence set.

Tip from exams: do not treat ADV cyber language as “generic risk factor boilerplate.” Boilerplate can still mislead if it omits the firm’s actual practices or implies protections you don’t have.

4) Define “update triggers” and run them like an incident process

You need explicit triggers that force a reassessment of Form ADV cyber disclosures. Use a trigger list such as:

• A cybersecurity incident that affects confidentiality, integrity, or availability of systems/data relevant to advisory operations.
• A significant change to cybersecurity program scope (new SOC provider, new IAM platform, end of MFA requirement, major vendor change).
• A new third party relationship that changes data flows for client information (new portfolio accounting system, CRM migration).
• An internal finding that contradicts a disclosure (audit shows “annual testing” didn’t happen).

When a trigger occurs, require a documented decision: Does this require updating Form ADV Part 2A now? Capture Legal/Compliance involvement and rationale.

5) Align marketing and client communications to ADV language

Because the Marketing Rule targets false or misleading advertisements, your cybersecurity positioning in pitch decks, website language, and RFP/ DDQ answers must not conflict with the ADV and must be supportable (17 CFR 275.206(4)-1). Create a “cyber claims library” of approved phrases with boundaries (what you can say, what you cannot say, and what evidence supports it). This reduces drift across teams.

SEC exam priorities signal ongoing attention to Marketing Rule compliance, which is where “cyber claims” often get tested through substantiation requests (2025-exam-priorities).

Required evidence and artifacts to retain

Retain artifacts in a way that supports an exam request for “show me support for this sentence.”

Disclosure governance

• Cyber disclosure claim inventory (with owners and last validation date)
• Version history and redlines for Form ADV Part 2A cyber sections
• Approval records (Security, Compliance, Legal as applicable)

Substantiation set (examples)

• Written cybersecurity policies and standards; review/approval logs
• Incident response plan and escalation procedures
• Security training records (completion logs and content outline)
• Risk assessment outputs tied to advisory operations (scoped and dated)
• Tabletop exercise report or targeted testing results; remediation tickets and closure evidence
• Third-party security oversight records for key providers (review notes, issue tracking)

Incident and change governance

• Incident register
• Triage notes and containment actions (as appropriate for confidentiality)
• Disclosure-decision log documenting whether ADV updates were needed, with sign-off

Common exam/audit questions and hangups

Create ready answers with evidence pointers:

• “Show support for your ADV statement that you ‘periodically test’ cybersecurity controls.” Provide test report(s) and remediation tracking.
• “Who approved this cybersecurity language?” Provide workflow evidence and sign-offs.
• “When did you last review the brochure’s cyber disclosures for accuracy?” Provide the claim inventory and validation dates.
• “Did you have any incidents that could render these statements misleading?” Provide incident register and disclosure-decision log.
• “Do your marketing materials repeat or expand these claims?” Provide the cyber claims library and a sample of governed materials.

Frequent implementation mistakes (and how to avoid them)

1. Aspirational language without scope. Fix by adding boundaries: what you do, for which systems, and at what cadence, and keep evidence.
2. Treating “we have policies” as sufficient. Policies must map to operating procedures, owners, and records of execution.
3. No decision log after an incident. Even if you decide no update is required, document the decision and approvers.
4. Inconsistent statements across channels. Put a single owner on cyber claims and require reuse of approved wording.
5. No periodic validation. If you claim testing, do testing. If you do not test, remove or narrow the claim.

Enforcement context and risk implications

You do not need an enforcement case to have enforcement risk. If your ADV brochure or marketing materials contain inaccurate cybersecurity statements, that can be framed as false or misleading dissemination under the Marketing Rule standard (17 CFR 275.206(4)-1). The SEC Division of Examinations has stated a focus on Marketing Rule compliance, increasing the likelihood of review of substantiation and governance around public statements (2025-exam-priorities). The practical risk is an exam deficiency that forces brochure amendments, remediation commitments, and potential referral if statements are materially misleading.

Practical 30/60/90-day execution plan

First 30 days (stabilize and inventory)

• Assign owners: CCO owns disclosures; Head of Security owns factual substantiation; Legal reviews “misleading” risk.
• Build the cyber disclosure claim inventory for Form ADV Part 2A.
• Collect evidence for each claim; flag any claim without proof.
• Freeze unsubstantiated language across marketing and DDQs until reconciled.

By 60 days (govern and align)

• Implement the disclosure approval workflow with evidence gates and sign-off.
• Create update triggers and a disclosure-decision log template; train Security and Compliance on when to open a decision record.
• Stand up a cyber claims library for marketing/RFP use that mirrors ADV boundaries.

By 90 days (validate and operationalize)

• Run a tabletop incident scenario that includes the “ADV update decision” step; retain outputs as evidence.
• Perform targeted validation against the highest-risk claims (monitoring, access controls, third-party oversight); open remediation items and track to closure.
• Set an ongoing review cadence tied to your compliance calendar and security program changes.

Daydream (where it fits)

If you already track controls, incidents, and third parties in multiple systems, the failure mode is drift: disclosures stay static while reality changes. Daydream fits as the control-and-evidence system of record that links each disclosure claim to a control owner, a validation artifact, and a change trigger, so brochure updates become a managed workflow instead of a scramble.

Frequently Asked Questions

Does the Marketing Rule citation really matter for Form ADV cybersecurity disclosures?

The operational standard is the same: statements relied on by clients cannot be untrue or misleading, and the SEC explicitly prohibits untrue or misleading advertisements (17 CFR 275.206(4)-1). Examiners also prioritize Marketing Rule compliance, which is where substantiation discipline is often tested (2025-exam-priorities).

What counts as “evidence” for a cybersecurity disclosure claim?

Evidence is whatever proves the claim is true in practice: approved policies, logs of execution, testing reports, vendor oversight records, and remediation tickets. A policy alone rarely substantiates an operational claim unless you can show it is implemented.

We outsource security monitoring to a third party. Can we still say “we monitor”?

Yes, if the statement is accurate and you can substantiate scope, oversight, and escalation. Keep the contract/SOW, oversight notes, and incident escalation records to show you supervise the service.

How do we handle an incident without over-disclosing sensitive details in Form ADV?

Separate the operational incident record (detailed, need-to-know) from the disclosure decision record (what changed, why it is or is not material to brochure language). The key is a documented, approved decision on whether existing statements became misleading.

Our ADV has generic cyber risk language. Is that safer than specific claims?

Generic language can still mislead if it implies protections you do not have or omits key qualifiers. Specific, scoped claims with evidence are usually easier to defend than broad assurances.

Who should own updates to the cyber sections of Form ADV Part 2A?

Compliance should own the document and the update process; Security should own factual accuracy and supporting artifacts; Legal should review for materially misleading phrasing. Put all three in the approval workflow so you can prove governance.