The SEC recently finalized a new rule under the Investment Advisers Act of 1940 to govern advertisements by registered investment advisers and payments to solicitors. The amendments create a single marketing rule that (i) revises the definition of an “advertisement,” (ii) sets forth seven general principles governing the use of advertisements, (iii) conditions the use of testimonials, endorsements and third-party ratings in advertisements, and (iv) sets forth requirements for the presentation of performance information in advertisements. The SEC also added corresponding recordkeeping requirements and revisions to Form ADV. The revised marketing rule will be effective 60 days after publication in the Federal Register, and will have a compliance date that is 18 months after the effective date.
