Compliant marketing: Breaking down the New Marketing Rule

Elizabeth Cope
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Elizabeth Cope: CEO & Lead Consultant, SEC Compliance Solutions, USA

Journal of Financial Compliance, 2023, vol. 7, issue 2, 120-139

Abstract: The Securities and Exchange Commission (SEC) adopted the New Marketing Rule on 4th May, 2021, giving registered investment advisers until 4th November, 2022 to comply. This New Marketing Rule (the Rule) replaced the original advertising rule that was adopted in 1961 and the original cash solicitation rule that was adopted in 1979. This much-needed update takes into consideration the modernisation of advisers' marketing efforts and combines the two old rules into one. As with any new rule, advisers run into the added challenge of interpretation. This Rule is primarily principles-based, and we do not know yet how the SEC will interpret advisers' various implementations. This paper will only address the requirements that apply to investment advisers registered with the SEC. As such, this paper will tackle the new definition of an ‘advertisement’, principles-based prohibitions, specific disclosure requirements and restrictions for performance, testimonials and endorsements, third party ratings, clarification on the applicability for private fund managers, new ADV disclosure requirements around advertising and new books and records requirements.

Keywords: marketing; solicitation; general prohibitions; disclosures; testimonials and endorsements; third party ratings (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
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