SEC Adopts Investment Adviser Marketing Rule

December 23, 2020

On December 22, 2020, the Securities and Exchange Commission (the “SEC”) announced it had finalized amendments1 designed to modernize the rules governing investment adviser advertisements and compensation to solicitors under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The amendments follow the SEC’s November 2019 proposal (the “Proposal”) to update each of the current Rule 206(4)-1 and Rule 206(4)-3 of the Advisers Act.2

The amendments combine and replace the current advertising and cash solicitation rules with a single amended Rule 206(4)-1 (the “Marketing Rule”). The Marketing Rule includes a new definition of “advertisement” that is more expansive than the current rule’s definition, among other changes. The SEC also adopted related amendments to Form ADV and Rule 204-2, the books and records rule.

The SEC has set the compliance date to be eighteen (18) months after the Marketing Rule’s effective date, which is sixty (60) days after its publication in the Federal Register. Any advertisements disseminated on or after the compliance date by advisers registered or required to be registered with the SEC will be subject to the new Marketing Rule.

In the coming weeks, Seward & Kissel LLP will provide an additional analysis of the new Marketing Rule.



2 Seward & Kissel LLP’s client alert on the Proposal may be found here.