On December 22, 2020, the SEC released its much awaited advertising and solicitation rule amendments, merging both rules together to create a new adviser marketing rule. We expect the changes to have a significant impact on future marketing efforts. The new rule will be effective 60 days after publication in the Federal Register with an 18 month transition period.
At a high level, the rule has the following areas of impact:
- The new definition of an advertisement;
- The elimination of the cash referral fee rule and conditions for use of testimonials and endorsements;
- General prohibitions and disclosure obligations;
- Actual and hypothetical performance advertising; and
- Compliance review and approval requirements.
Join us on January 6, 2020 at 3pm Eastern for a webinar on initial impressions of the rule and implementation concerns to think ahead to.
The marketing rule reflects important updates to the traditional advertising and solicitation regimes, which have not been amended for decades, despite our evolving financial markets and technology. This comprehensive framework for regulating advisers’ marketing communications recognizes the increasing use of electronic media and mobile communications and will serve to improve the quality of information available to investors. - Jay Clayton, SEC Chair 2017-2020