Vedder Price

Vedder Thinking | Articles SEC Proposes Modernizing Adviser Advertising and Cash Solicitation Rules


Reader View

On November 4, 2019, the U.S. Securities and Exchange Commission (SEC) proposed significant amendments to the rules under the Investment Advisers Act of 1940 (Advisers Act) governing investment adviser advertisements and compensating solicitors.

If adopted, the amendments to Rule 206(4)-1 (the Advertising Rule), which has not changed substantively since its adoption in 1961, would modernize the regulation of adviser advertising to account for technological developments, changing investor profiles and consumer habits by, for instance, permitting the use of testimonials and endorsements and third-party ratings, subject to certain conditions, and, in general, replacing broadly drawn limitations with a principles-based approach. Notably, the proposed amendments would in some cases have different requirements depending on whether the advertisement was for a Retail Investor or a Non-Retail Investor. The proposed amendments to Rule 206(4)-3 (the Solicitation Rule), are intended to respond to changed industry practices since its adoption in 1979.

Continue reading below. 


Maureen A. Miller


Nathaniel Segal


Jeff VonDruska