Compliance Briefing — November 4, 2022
SEC-registered investment advisers must now comply with the modernised Marketing Rule, governing testimonials, endorsements, performance advertising, and Form ADV disclosures.
Executive briefing: The U.S. Securities and Exchange Commission’s Investment Adviser Marketing Rule (Advisers Act Rule 206(4)-1) reached its mandatory compliance date on 4 November 2022. Advisers must update marketing materials, solicitation arrangements, performance presentations, and Form ADV filings to align with the unified rule.
Key compliance checkpoints
- Policies and procedures. Implement written policies covering testimonials, endorsements, third-party ratings, and paid solicitations.
- Performance advertising. Ensure hypothetical, extracted, and predecessor performance meet disclosure, criteria, and oversight requirements.
- Form ADV updates. Amend Part 1A (Item 5.L) and Part 2A to describe marketing practices and compensation arrangements accurately.
Operational priorities
- Inventory review. Catalogue all marketing materials, investor presentations, social media content, and solicitor agreements for compliance sign-off.
- Supervision and testing. Establish pre-use approval, periodic sampling, and forensic testing of marketing content.
- Third-party oversight. Conduct due diligence on placement agents, promoters, and rating providers to verify disclosure obligations are met.
Enablement moves
- Deploy marketing review workflows with audit trails to evidence approvals and version control.
- Integrate performance calculation governance with GIPS or internal verification standards to support disclosures.
- Train distribution and compliance teams on new definitions (advertisement, testimonial) and record-keeping expectations.
Sources
- SEC Release IA-5653 — Investment Adviser Marketing
- SEC Division of Examinations risk alert on the Marketing Rule
Zeph Tech assists advisers with marketing inventory remediation, control automation, and examination readiness for the Marketing Rule era.