04.18.24

SEC Risk Alert Warns Investment Advisors of Marketing Rule Missteps

by: Aaron Nicodemus

In a new risk alert, the U.S. Securities and Exchange Commission's Division of Examinations said it found some investment advisory firms’ policies and procedures were “not reasonably designed or implemented to address compliance" with its amended marketing rule. Gaps included policies and procedures that contained only general descriptions and expectations related to the marketing rule; that failed to address channels used by advisors to place marketing materials, such as websites and social media; and that were incomplete, not updated or only updated for certain marketing topics. Examiners also noted instances where advisors used prohibited advertising material, such as containing an untrue statement of material fact, omitting a material fact necessary to make a statement and making a material statement the advisor might not be able to substantiate.

Read the full article on Compliance Week