MODERNIZING MARKETING AND ADVERTISING RULES
The new SEC marketing rule gives investment advisers new ways to grow their business, as well as new ways to run afoul of regulations. Though it makes the use of modern marketing tools such as social media and testimonials possible, firms must comply with all of the rule’s provisions to use any of the methods that are now permitted. RegEd offers the following resources on the new marketing rule, its impact on the industry, and how firms can prepare so that investment advisers can reduce non-compliance risk while growing their business.
Rule Milestones
Dec. 22, 2020: SEC adopts modernized marketing rule for investment advisers.
March 5, 2021: Rule is published in the Federal Register.
May 4, 2021: SEC Marketing Rule takes effect.
Oct. 29, 2021: SEC withdraws and modifies staff letters related to rulemaking on investment adviser marketing.
Nov. 4, 2022: Compliance date.
INDUSTRY NEWS
Follow updates on the rule’s passage and adoption from financial services publications and industry subject matter experts.
Marketing Rule Compliance Checklist for Investment Advisers
Eversheds Sutherland has released a compliance checklist for the US Security and Exchange Commission’s (SEC) new Marketing Rule 206(4)-1 to help investment adviser firms navigate the complexities of the new regulation for advertisements and other forms of marketing.
SEC Marketing Rule 206(4)-1 (Bloomberg Law Professional Perspectives)
In this article for Bloomberg Law Professional Perspectives, Eversheds Sutherland attorneys discuss the amendments to the Advertising and Cash Solicitation Rules that resulted in the Marketing Rule and take a closer look at what advisers need to consider moving towards the final compliance date.
Investment Adviser Marketing Rule Update: Investment Management and Private Funds — What’s Happening Now?
In this roundtable, Troutman Pepper attorneys discuss the SEC’s new Investment Advisor Marketing Rule, which, creates a single, more modernized rule, replacing current advertising and cash solicitation rules.
REGULATORY RESOURCES
Read the rule and related documents from the SEC.
INFORMATION UPDATE: SEC Staff Statement Regarding Withdrawal and Modification of Staff Letters Related to Rulemaking
“Investment advisers do not have the option of complying with certain provisions of the old Advertising and Solicitation Rules while complying with other provisions from the new Marketing Rule. It’s all in or nothing.”
– Margie Webber, Director of Regulatory Compliance for RegEd
REGED RESOURCES
Get articles and analysis from RegEd surrounding the new SEC Marketing Rule.
ARTICLE: Leveraging Technology to Address the New SEC Marketing Rule (Part One)
The focus of this article are on some other items that your firm should consider adding to its to-do list as part of its preparation and subsequent compliance processes, and the technology that can assist you. The first set of items on the to-do list relate to the creation, communication, and acknowledgement of your policies and procedures.
ARTICLE: SEC Continues to Update Rules for Investment Adviser Marketing
Investment adviser marketing has taken another step into the present now that the SEC has announced it is withdrawing or modifying over 200 staff letters and guidance statements related to the decades-old Advertising and Cash Solicitation Rules. Most of the no-action relief letters being withdrawn are related to issues that are now covered in the SEC’s modernized Marketing Rule.
ARTICLE: Leveraging Technology to Address the New SEC Marketing Rule (Part Two)
The focus of this article are on some other items that your firm should consider adding to its to-do list as part of its preparation and subsequent compliance processes, and the technology that can assist you. The second part of the to-do list relates to actions to take to help monitor compliance with the firm’s polices after implementation.
BLOG POST: SEC Releases Risk Alert on Adviser Marketing Rule Outlining Key Areas of Focus for Examinations
The Securities and Exchange Commission (SEC) recently published a risk alert highlighting additional areas of focus in relation to the amended Marketing Rule. In addition to the initial Marketing Rule exam areas of review, the recent alert emphasizes three key areas of additional emphasis: testimonials and endorsements, third-party ratings, and Form ADV.
WEBINAR: Complying with the SEC Marketing Rule – Case Studies to Illustrate Potential Pitfalls and Tips to Achieve Effective Compliance
This session features an expert panel that provides insight into complying with the new SEC Marketing Rule. During the session, panelists present a series of case studies to illustrate the potential pitfalls and tips on achieving effective compliance with the rule.
REGED SOLUTIONS
RegEd enterprise technology supports compliance with the SEC Marketing Rule.
Enterprise Advertising Review
RegEd’s Enterprise Advertising Review solution simplifies compliance with the SEC’s marketing rule, reducing review time by more than 50%, and in some cases, by close to 80%. It also increases the accuracy and consistency of reviews. For example, Lexicon Detection automatically flags problematic keywords and phrases using firm-customized business rules while Smart DisclosuresSM detects and confirms that submission items contain the proper disclosures.
In addition to its Submission Intelligence and Intelligent Review capabilities, Enterprise Advertising Review offers a streamlined user experience, complex hierarchy management, advanced indexing and searching, and FINRA AREF integration. Scores of leading financial services firms and banks have relied on Enterprise Advertising Review to review more than 3 million marketing, advertising, and customer communications.
Policies & Procedures Management
Financial professionals and compliance staff must know what potential problems to look for when preparing or reviewing marketing or advertising materials. The SEC’s marketing rule includes regulations for social media posts, testimonials, and performance advertising, for example.
RegEd’s Policies & Procedures Management solution improves compliance by enabling comprehensive, end-to-end administration and oversight of all elements of a firm’s policies and procedures, such as how to properly prepare and review marketing or advertising materials. The solution also allows firms to link policies and procedures to rules and regulations, thereby ensuring that critical compliance information is current.
Education & Training
Identifying the most frequent advertising compliance issues for investment advisers and their representatives also helps them comply more efficiently. RegEd increases efficiency by assisting investment advisers in considering whether their advertisements are consistent with the regulations.
RegEd’s Education & Training Solution Suite offers investment adviser representative courses such as “Marketing & Advertising Communications,” which provides an overview of regulations. Additional education opportunities for IARs include a course in “Performance Advertising,” which highlights the use of past specific recommendations and necessary performance disclosures, for example.
