A Guide to the Presentation of Performance Under the New Marketing Rule

Author

Julia Reyes, Partner, ACA Group

Publish Date

Type

Report

Topics

  • Performance
  • SEC Advertising Rule

The Securities and Exchange Commissions’ (SEC) Rule 206(4)-1 (Marketing Rule) under the Investment Advisers Act of 1940 has been a long-awaited effort to modernize the rules that govern firms’ ability to advertise to prospective investors. Historically firms would need to comb through a combination of sources from the advertising rule, cash solicitation rules, no-action letters, and industry interpretations to make best efforts on the firm’s marketing.

This new rule combines old and new concepts that will have a direct impact on the way firms present performance in the future and we have included some of the key concepts within in this discussion. Firms that have voluntarily adopted the CFA Institute’s Global Investment Performance Standards (GIPS®) will similarly find some new concepts that will need to be considered.

In this guide we talk about these changes and how firms can prepare to present performance in line with the new rule and actions they can take now in preparation for the final compliance date set for November 4, 2022. 
 

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How ACA is helping firms prepare for the Marketing Rule

ACA can explain the requirements of the final Marketing Rule as they relate to any current marketing practices. Our risk and compliance management solutions incorporate consulting, managed services, technology, and education to provide our clients with a holistic approach to addressing risk, increasing operational efficiencies, and meeting regulatory requirements while adhering to industry best practices. 

  • Marketing Rule Performance Gap Analysis: Assists your firm in assessing the gaps between current performance advertising practices and the new Marketing Rule. The review covers disclosure help, books and records, policies and procedures development, gross and net return calculation methodologies, and composite construction (related portfolio) consulting. 
  • PAS Dashboard: Assists your firm in meeting the new requirement pertaining to marketing related performance by providing a technology solution that will conduct outlier analysis, strategy drift analytics, and scoring metrics to allow for adequate oversight. 
  • Customized Training: Provides your firm with customized trainings that cover and define many of the key definitions within the new Marketing Rule.
  • ComplianceAlpha® Marketing Review Solution: Helps your firm’s marketing and legal teams easily manage workflows for submitting, reviewing, approving, and archiving marketing and advertising materials.
  • Marketing and Advertising Review Assistance: Allows your firm to significantly reduce the amount of time and resources devoted to the marketing and advertising review process. ACA’s skilled compliance professionals can step in during periods of high volume or assist your firm with enhancing collateral review workflows and protocols. 

ACA's SEC Marketing Rule resources

Visit our resource center  or subscribe to get our insights and guidance on the SEC Marketing Rule. 

For more information 

If you have any questions about the new Marketing Rule or how ACA can help your firm evaluate and update its advertising and solicitation procedures to comply or to assess your broader compliance review resourcing, please reach out to your ACA consultant or contact us below.

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