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On Dec. 22, 2020, the SEC announced finalized reforms under the Investment Advisers Act to modernize rules governing investment adviser advertisements and payment to solicitors. The amendments create a single, comprehensive new rule (“Marketing Rule”) aimed at efficiently regulating investment advisers’ marketing and communications. The new regulations replace the current advertising and cash solicitation rules.

The IPA submitted a largely in favor of a new rule framework in Sept. 2019, when the proposed amendments were first announced. Our letter encourages the SEC to coordinate any reforms with FINRA to ensure that broker-dealer advertising is consistent with treatment of such reforms for investment advisers. The newly released Marketing Rule is an efficient solution to modernize the old patchwork of rules governing adviser advertising, marketing and communications while maintaining the SEC’s objective of retaining a principles-based framework.

Some highlights from the Marketing Rule include:

  • expanded and more clear definition of what kind of communications are considered advertisements;
  • expanded definition of testimonials and endorsements;
  • adoption of general anti-fraud content standards;
  • updated recordkeeping requirements and withdrawal of various no-action letters that are incorporated into the rule or no longer apply;
  • discards the previously proposed requirement for advisers to review and approve all advertisements prior to use.

The Marketing Rule becomes effective 60 days after publication in the Federal Register, and the SEC has established a compliance date of 18 months after the effective date to give advisers time to make any operational adjustments.

In addition to the SEC’s and , we encourage you to for our webinar on February 9 discussing the Marketing Rule in more detail. Please visit our website for an outline of all upcoming in 2021.

Thank you,

Anya Coverman
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives