As the compliance date for the Advisers Act Rule 206(4)-1 (Marketing Rule) quickly approaches, the SEC has issued an alert outlining key areas of focus:

“On December 22, 2020, the Securities and Exchange Commission (SEC or Commission) adopted reforms under the Investment Advisers Act of 1940 (Advisers Act) to modernize rules that govern investment adviser advertisements and payments to solicitors. The amendments created a single rule that replaced the previous advertising and cash solicitation rules. The Division of Examinations is publishing this Risk Alert to inform SEC-registered investment advisers (investment advisers or advisers), including advisers to private funds, about upcoming review areas during examinations focused on amended Advisers Act Rule 206(4)-1 (Marketing Rule). The compliance date for the Marketing Rule is November 4, 2022 (Compliance Date). As of the Compliance Date, investment advisers may no longer choose to comply with the previous advertising and cash solicitation rules. In addition, as of the Compliance Date, the staff is withdrawing certain staff statements relating to the previous advertising and cash solicitation rules.

Any advertisements disseminated on or after the Compliance Date by advisers registered or required to be registered with the Commission are subject to the Marketing Rule. Advisers should consider whether they need to update or revise their written policies and procedures, as required by Advisers Act Rule 206(4)-7, to ensure they are reasonably designed to prevent violations by the advisers and their supervised persons of the Marketing Rule. In addition, Advisers Act Rule 204-2 (Books and Records Rule), as amended, will require investment advisers to make and keep certain records, such as records of all advertisements they disseminate, including certain internal working papers, performance related information, and documentation for oral advertisements, testimonials, and endorsements.”


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