Carlotta King Discusses SEC Ad Rule Proposal

In February, MFA submitted a letter to the SEC in response to its proposed advertising and solicitation rules. The Association outlined a number of recommendations and alternative fallback positions for the agency to take. Click here to read the full letter.

Below is a brief summary of the proposed amendments as well as the Factsheet and Rule Release.

  1. Advertising Rules – The proposed amendments to the advertising rules would replace the current rule’s broadly drawn limitations with principles-based provisions. The proposed approach would also permit the use of testimonials, endorsements, and third-party ratings, subject to certain conditions, and would include tailored requirements for the presentation of performance results based on an advertisement’s intended audience.
  2. Cash Solicitation Rules – The proposed amendments to the solicitation rule would expand the current rule to cover solicitation arrangements involving all forms of compensation, rather than only cash, subject to a new de minimis They also would update other aspects of the rule, such as who is disqualified from acting as a solicitor under the rule.  NOTE: This rule would apply to investors in private funds.

Click here for the Factsheet
Click here for the Proposed Rule Release