03.20.25
SEC Marketing Rule Guidance Lightens Burden on Investment Performance
by: Alex Ortolani
In anticipated amendments to guidance on the U.S. Securities and Exchange Commission’s (SEC) marketing rule, the regulator’s Division of Investment Management has lightened the burden for registered investment advisors when reporting investment performance in marketing materials. In an amended frequently asked questions document, the division wrote that when an investment advisor advertises gross and net performance of a total portfolio “prominently,” then it can show gross performance of an extract of that investment or group of investments without also needing to show net-of-fee performance. If an advisor meets certain criteria for such marketing material, then the division “would not recommend enforcement action” to the Securities and Exchange Commission (SEC).
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