SEC Marketing Rule Enforcements Appear Inevitable
News and Alerts
Brief Introduction
The SEC Marketing Rule has been in full effect with a compliance date of November 4th, 2022.
Recently, the Investment Adviser Association (“IAA”) has learned of multiple deficiencies in the implementation of the Marketing Rule by member Firms that will likely lead to SEC Enforcement Actions in 2023.
SEC Exam Discoveries
- Some Firms have made no changes to their policies regarding marketing materials and have not instituted any formal reviews of their marketing practices.
- Others have continued using testimonials and endorsements without providing proper disclosures.
SEC Viewpoints on Marketing Rule Implementation
It is appears likely that the SEC will be looking for:
- Properly updated policies to show an attempt to remain compliant with the Rule.
- Changes in marketing practices and adjustments to currently used materials in anticipation of an SEC Examination.
- Proof that a good effort is being made for full compliance.
Due to the length of time given by the SEC, it is expected that the SEC will heavily punish Firms that have made little effort to change their processes.
Vigilant’s Conclusion
As the SEC obtains more resources to increase its investigative capabilities, Firms should expect the potential for a heavy emphasis on Marketing Rule Compliance during Examinations.
It is vital that Firms can provide documentation of a good faith effort to rigorously update their marketing materials and practices.
If your Firm needs continued support in becoming compliant with the Marketing Rule and assistance with Marketing Review, contact Vigilant by clicking the button below.