March 26, 2021

Jim Lundy Talks to ThinkAdvisor About Compliance With New SEC Investment Adviser Marketing Rule

In the ThinkAdvisor article “SEC Warns Advisors on Ad Rule Compliance,” Partner Jim Lundy evaluated the recent frequently asked question (FAQ) from the Securities and Exchange Commission (SEC) on the new Investment Adviser Marketing rule, which replaces the current Advertising and Cash Solicitation Rules.

As a primary point, the SEC stated, “An adviser may choose to comply with the amended marketing rule in its entirety any time starting on the effective date, May 4th, 2021. Until an adviser transitions to the amended marketing rule, the adviser would continue to comply with the previous advertising and cash solicitation rules and look to the staff’s positions under those rules.”

Regarding the SEC’s answer, Lundy said, “It’s interesting that they start off the answer to the FAQ with the word ‘may,’ which contributes to this FAQ lacking some clarity.” As a recommendation, Lundy then added, “Firms planning for this transition should develop and implement documented plans to convert to being compliant with the amended marketing rule if they want to comply with the new rule after the May 4, 2021, effective date and before the Nov. 22, 2022, compliance date.”

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