Published on Dec 22nd, 2020 |

The SEC just released an important announcement today (12/22) stating that it has finalized reforms under the Investment Advisers Act to modernize rules that govern investment adviser advertisements and payments to solicitors.  Neither rule has been amended significantly since its adoption over 40 years ago.

It is very important to look at the following takeaways below regarding when this becomes effective and other key information:

  • This rule is effective 60 days after publication in the Federal Register
  • The grace period advisers have to comply is 18 months after the effective publication date

Vigilant can assist with the changing Compliance landscape and rules regarding advertising which is apart of ALL of our current services. To learn more about Vigilant click HERE.


It is important to note that the amendments create a single rule that replaces the current advertising and cash solicitation rulesThe final rule is designed to comprehensively and efficiently regulate investment advisers marketing communications.

The new Marketing Rule recognizes the advancement in communication technology and the recent landscape of advisory services.

SEC Chairman John Clayton provided a quote regarding this new rule stating: “This comprehensive framework for regulating advisers’ marketing communications recognizes the increasing use of electronic media and mobile communications and will serve to improve the quality of information available to investors. The new rule provides for an extended compliance period intended to provide advisers with a sufficient transition period, including to enable consultation with the Commission’s expert staff.”

Below is how the amendments to Rule 206(4)-1 replace from the drawn limitations in the past:

  • Definition of Advertisement
    • one that governs solicitation activities and one that captures communications traditionally covered by the advertising rule
  • General Prohibitions
    • The marketing rule will prohibit advertising practice that can be found HERE
  • Testimonials and Endorsements
    • The Marketing rule prohibits the use of testimonials and endorsements in an advertisement, unless the adviser satisfies certain disclosure, oversight, and disqualification provisions
  • Third-Party Ratings
    • Unless the adviser provides disclosures and satisfies certain criteria to the rating, this rule will prohibit the use of third-party ratings in an advertisement
  • Performance Information Generally
    • The rule prohibits any advertisement which can be seen in this image HERE for greater detail

Additional Important takeaways to take note of from this SEC Release:

  • The Commission also adopted amendments to the books and records rule
  • The Commissions amended Form ADV to require advisers to provide additional information regarding their marketing practices to help enforce capabilities and facilitate the Commission’s inspection
  • No-action letters will be withdrawn from the staff of the Division of Investment Management

Want to learn more about this SEC release?

Click HERE to see the full Marketing Rule