Paul Peter Nicolai
SEC's New Marketing Rule for Investment Advisers
Updated: Mar 8, 2021
On 22 December 2020, the U.S. Securities and Exchange Commission (SEC) adopted a new rule to regulate investment adviser advertising and solicitation practices.
This is the first substantive amendment to its old rule since 1961. It has broad implications for the compliance and business practices of most investment advisers in the United States.
The SEC elected to replace the current versions of the advertising rule and the solicitation rule with a single Marketing Rule. With the implementation of the new Marketing Rule, the SEC will withdraw dozens of SEC staff no-action letters interpreting the existing rules. In place of these no-action letters investment advisers will need to comply with the Marketing Rule’s combination of prohibitions and prescriptive requirements for certain content.
The Marketing Rule takes effect 60 days after publication in the Federal Register. Investment advisers subject to the rule may transition their practices to comply with the final rule in full at any point during the 18-month transition period after the effective date.