UpFront » October 2022

The SEC’s newly amended Disclosure Rule from a 2020 proposal will require mutual funds and ETFs to provide enhanced shareholder reports that are more visually appealing. The funds will also need to promote transparency in presentations of fees and expenses in fund advertising. A primary audience of retail investors is expected to benefit from fund materials that are easier to decipher with clear and concise information, graphics and text features. In the lead quotes, FrontLine’s…

The SEC’s November 4th compliance date for its Marketing Rule lies just ahead – and the private equity industry is still grappling with meeting its requirements. Notably, these firms are being challenged by how the rule dictates fund performance should be presented in materials for investors. Amy Lynch, FrontLine’s Founder and President, expects many PE firms to only be partially compliant by the deadline, even with the SEC alerting the industry it will roll out…

Since ending the voluntary self-reporting by firms during its share class initiative, the SEC continues to bring cases on 12b-1 fees citing share class selection and revenue sharing violations. These appear to be follow-on actions against firms that were previously under investigation during the SEC initiative. One recent case against Cetera Advisors resulted in a $9 million settlement with the SEC. The SEC found that the firm invested clients in mutual fund share classes charging…

Compliance and marketing teams are about to go head-to-head on the SEC’s new Marketing Rule. That’s because the rule now opens the door for greater use of testimonials and endorsements, but it also opens a can of worms for compliance. Commenting for the InvestmentNews cover story, FrontLine’s Founder and President Amy Lynch believes many firms will be slow to embrace testimonials. There’s a broad definition of advertising in the rule that requires fair and balanced…

With a new rule on tap, investment advisers are thinking creatively about how to expand marketing through social media, videos and other channels to leverage positive client input. The first step is to understand that these may be  tricky areas within both the scope of the SEC’s new Marketing Rule and what is required within refreshed firm policies. Amy Lynch, FrontLine’s Founder and President, explains that firm policies need to address the new rule requirements…