Investment Advisers: Time Is Up! Are Your Marketing Policies And Procedures Exam-Ready? – Advertising, Marketing & Branding – United States – mondaq.com

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The SEC Department of Examinations (DOE) released a Risk Alert yesterday, that
the staff will “conduct a number of specific national
initiatives” in addition to broad review through examinations,
for Investment Advisers’ compliance with the New Marketing Rule.

Specifically, the staff will review:

  • Whether RIAs have adopted and implemented written policies and
    procedures (P&Ps) that are “reasonably designed” to
    prevent violations; noting that for such P&Ps to be effective,
    they should include “objective and testable means”
  • Whether RIAs can substantiate material statements of fact in
    advertisements, as the New Marketing Rule prohibits any such
    statements that the Adviser can’t substantiate;
  • Whether RIAs are in compliance with the New Marketing
    Rule’s Performance Advertising Requirements, including their
    numerous prohibitions; and
  • Compliance with the new Books and Records Requirements,
    including updates to the Form ADV.

The compliance date for the new Marketing Rule is November 4,
2022, just six weeks away. The New Marketing Rule was adopted on
December 22, 2020, and became effective on May 4, 2021, giving
advisers (a) an 18 month transition period and (b) a choice during
the transition period of complying with the SEC’s Marketing and
Advertising Rules that were previously in effect, or the New
Marketing Rule, with the caveat that advisers needed to fully
comply with one or the other. Advisers have had almost two years to
update their Marketing and Advertising P&Ps for the New
Marketing Rule, including the rules applicable to third-party cash
solicitations.

For RIAs that haven’t yet updated their Advertising and
Marketing P&Ps, time is quickly running out. It seems
that the any potential grace period will have expired by the
compliance date, with the DOE already announcing its intent to
examine advisers’ compliance with the new rules.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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