Keith Laska, Hanzo: The Updated SEC Marketing Rule and How It’s Changed Archiving Requirements

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Extract from Keith Laska’s article “The Updated SEC Marketing Rule and How It’s Changed Archiving Requirements”

Toward the end of December 2020, the U.S. Securities and Exchange Commission (SEC) announced the release of a new comprehensive marketing rule. The original advertising rule had not been substantively amended or updated since its adoption in 1961. In other words, it was older than the personal computer, the internet, smartphones, and many advisers.

Here’s what’s new.

Highlights of the SEC’s New Marketing Rule

The new rule is intended to reflect the evolution in technology, communications, and how investment advisers promote and advertise their offerings, all of which have obviously changed a lot since 1961. The gist of the modernized rule is that it should prevent fraud and aid investors—who are far savvier than they used to be—with making apples-to-apples comparisons between different services.

There’s just one new rule, but it’s doing the job of two: the existing advertising rule, Rule 206(4)-1, and the cash solicitation rule, Rule 206(4)-3. This combination, the SEC notes, is meant to “comprehensively and efficiently regulate advisers’ marketing communications.” To encompass both previous rules, the SEC has redefined “advertisement” to include two distinct prongs. 

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