Published on Oct 24th, 2022 |

Vigilant Insights

Brief Introduction

The New Marketing Rule goes into full effect November 4th 2022.

Firms across the industry should be taking immediate action to ensure that they are fully compliant. We are providing a helpful checklist of significant tasks for any compliance department making the proper preparations.

7 Steps to Maintain Compliance

  1. Audit all marketing materials
    • Any exaggerated claims, embellishments, and implications of hypothetical performance should be removed from marketing materials. You should be able to defend all statements and positive descriptions in marketing materials.
  2. Ensure all staff are onboard
    • All staff, especially those developing marketing materials, should go through specific training to show evidence that your firm is making the attempt to remain compliant.
  3. Make relevant changes to policies and procedures
    • Compliance policies and procedures should acknowledge the new requirements, and it is necessary to create new policies that incorporates the new definition of advertisement, requires reviewing of marketing materials, and limits the use of hypothetical performance.
  4. Audit your online presence
    • All company websites and social media postings are subject to the requirements of the advertisement rule. This content should be audited for compliance, and on-going monitoring should be established.
  5. Prepare supporting documents
    • Any statements of fact made in advertisements should have supporting materials readily available. Create a documentation system that can easily locate supporting materials if the SEC makes a request.
  6. Analyze investment performance used in marketing materials
    • When advertising performance, there now should be significant disclaimers. It is essential that there is no confusion between actual and hypothetical performance when metrics are included in advertising material.
  7. Reach out to all third-party solicitors
    • Any materials distributed by another party on your firm’s behalf will be subject to the new advertising rule. You should have meetings with these parties to ensure they are compliant.

Vigilant’s Final Conclusion

The New Marketing Rule requires significant auditing of advertising materials, policies, and procedures.

As the deadline quickly approaches, please reach out to Vigilant for all compliance support your firm may need to stay up to date with the new regulations.

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