As part of Solutions Review’s Premium Content Series—a collection of contributed columns written by industry experts in maturing software categories—Harriet Christie, the Chief Operating Officer at MirrorWeb, explains what the SEC’s new Marketing Rule is and outlines how companies can ensure their compliance with the new standards.
The U.S. Securities and Exchange Commission’s (SEC’s) Marketing Rule was approved in December 2020 and enacted on May 4, 2021. From that point, Registered Investment Advisers (RIAs) have had an 18-month transition period—until November 4, 2022—to adhere to its updated regulations. This article will explore how and why it has come into practice, the changes made, and the subsequent steps RIA compliance teams must take.
Why Now?
The appeal behind the modernization of the existing Advertising Rule 206(4)-1 is clear. It has remained essentially unchanged since its adoption in 1961, an era that predates the internet, personal computers, and a large proportion of the technology at businesses’ disposal in 2022. Resultantly, the doctrine is out of touch with the landscape it governs. It specifically impacts RIAs based (or providing services) in the United States. The updated iteration reflects modern habits, namely the mass consumption of digital media and the abundance of channels through which that occurs.
Is it Mandatory?
As part of the new Marketing Rule, the SEC will operate on a clean slate basis, withdrawing all of the arbitrary guidance issued as a stopgap since the original Advertising Rule. The regulator recognizes that “this amended rule replaces an outdated and patchwork regime on which advisers have relied for decades.” It’s a significant overhaul, which is why firms were granted 18 months to adhere.
Despite this generous grace period, it would be remiss to anticipate leniency when November 4th arrives. On the contrary, ample time has been granted to ensure the necessary upheaval, so…
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