Firms Struggling with the Marketing Rule | Will Clark Insights
VIGILANT INSIGHTS
Introduction
As the SEC investigates and charges Firms for Marketing Rule violations, it has been reported that Private Funds and Separately Managed Account (“SMA”) Managers are struggling with it.
Compliance departments have begun building strategies for success utilizing tools such as SEC Risk Alerts, but Firms are continuing to look for guidance.
In a recent article by Fundfire, Vigilant Director, Will Clark, CIPM, MBA, discusses how the transitions required by the Marketing Rule may have affected SMA managers differently from Private Funds.
Will Clark Insights
Earlier this year, the SEC added further complications for Private Funds with updated guidance about the role of subscription lines of credit in determining their performance data.
Will Clark discusses how many SMA Managers already comply with Global Investment Performance Standards, which may have made the requirements of the Marketing Rule less of a shock. This is in stark contrast to the Private Fund world, which he describes as having historically little regulation regarding advertising.
He acknowledges that a complex Marketing Rule being applied to an area of industry that had almost no regulation previously is going to feel burdensome to the Private Fund Managers.
Vigilant’s Conclusion
While the Private Fund Rule has been overturned by an appeals court, the Marketing Rule is in full effect and is a top priority for the SEC.
While current enforcement could be seen as targeting the low-hanging fruit, it can be anticipated that the Division of Enforcement could make their way to the Private Fund sector as the SEC expands the scope of their investigations.
It is vital that Private Funds ensure that they have taken all the necessary steps to ensure compliance with the Marketing Rule. For On-Going Support in this endeavor, reach out to us today to discuss how your Firm continues to comply with the Marketing Rule.