New Marketing Compliance FAQs
SEC Releases
Introduction
Marketing Compliance remains a top regulatory priority for the SEC, as reinforced by continued examination focus and recent guidance from the Division of Investment Management. Following the themes outlined in our coverage of the recent Marketing Rule Risk Alert, regulators are increasingly scrutinizing not just marketing content itself, but also the processes, controls, and judgments Firms use to support Compliance with Rule 206(4)-1.
On January 15, 2026, SEC staff updated its Marketing Compliance FAQs, introducing two new FAQs that provide important clarification on the following:
- The use of Model Fees versus Actual Fees in Performance Advertising.
- Testimonial and Endorsement disqualification related to Self-Regulatory Organization (SRO) final orders.
Together, these updates underscore the SEC’s continued emphasis on fact-specific analysis, transparency, and robust Marketing Review oversight.
Key Takeaways from the New FAQs
1. Use of Model Fees vs. Actual Fees in Performance Advertising
The first new FAQ addresses a long-standing area of interpretive complexity, whether Advisers may present Net Performance based on Actual Fees when the Anticipated Fees charged to the intended audience are expected to be higher.
Key takeaways include:
- The Marketing Rule permits Net Performance to be shown using either Actual Fees or a Model Fee, subject to conditions.
- Footnote 590 of the adopting release makes clear that if Anticipated Fees are higher than Historical Actual Fees, Advisers must ensure that Performance Presentations do not violate the Rule’s general prohibitions against misleading statements.
- Importantly, SEC staff clarified that footnote 590 does not categorically prohibit the use of Actual Fees in all circumstances.
- Whether the use of Actual Fees is permissible depends on the facts and circumstances of the Advertisement, including the nature, prominence, and clarity of disclosures.
- Advisers may use various methods to illustrate the impact of fee differences, provided the presentation is fair, balanced, and not misleading.
Compliance takeaway: Firms should avoid rigid, one-size-fits-all approaches to Performance Presentation and instead document the rationale for fee methodologies used, supported by tailored disclosures and a well-defined Marketing Review Process.
2. Testimonials and Endorsements: SRO Final Order Disqualification
The second new FAQ provides clarity on Testimonial and Endorsement eligibility when an individual has been subject to a final order issued by a self-regulatory organization within the prior 10 years.
Key takeaways include:
- Rule 206(4)-1(b)(3) generally prohibits Advisers from compensating ineligible persons for Testimonials or Endorsements.
- Staff clarified that it will not recommend Enforcement Action when the sole disqualifying event is an SRO final order, provided specific conditions are met.
- These conditions include:
- The individual was not barred, suspended, expelled, or prohibited from acting in any capacity by the SRO.
- The individual is fully compliant with the terms of the final order.
- The Advertisement includes clear Disclosures for 10 years following the date of the SRO order regarding the order, including the order itself or a link to it.
- This position aligns with the Commission’s rationale for similar treatment of Commission orders that do not impose bars or suspensions.
Compliance takeaway: Firms must conduct and document thorough Due Diligence on Testimonial providers and maintain Disclosure Controls that ensure on-going Compliance throughout the required disclosure period.
Vigilant’s Conclusion
Taken together, these new FAQs reinforce a central message from the SEC which is that Marketing Rule Compliance is not purely a technical exercise, it is a governance and judgment-based discipline.
As highlighted in our recent Marketing Rule Risk Alert, regulators are increasingly focused on how Firms operationalize Compliance through documented review processes, escalation protocols, and cross-functional oversight.
Establishing a formal Marketing Review and Advertising Review Process supported by experienced Compliance Professionals is critical to navigating nuanced issues such as Performance Fee presentation and Testimonial eligibility. Firms that rely on ad-hoc reviews or informal interpretations face heightened regulatory risk in an environment where the SEC continues to prioritize Marketing Practices during Examinations.
Vigilant helps Firms implement practical, defensible Marketing Compliance frameworks that align regulatory expectations with real-world business needs.
With Marketing Compliance remaining squarely in the SEC’s sights, proactive review, documentation, and expert support are no longer optional, they are essential.