SEC expands Marketing Rule enforcement (ThinkAdvisor)

The SEC has stepped up its examinations of investment advisers to include an enlarged focus on Marketing Rule-related areas. A recent alert issued by the regulator implies a more expansive approach to reviewing for compliance with the Marketing Rule. Amy Lynch, FrontLine’s Founder and President, explains that current and future exams will now include more reviews of testimonials and endorsements and third-party ratings while continuing to examine early focus areas such as policies and procedures and books and records. Ms. Lynch describes the new alert as a reinforcement of the SEC’s stated objectives to substantiate claims made in marketing materials with firm backup data. When questionnaires for ratings are used, she advises firms to be prepared to prove that the questionnaire was not so biased as to produce only favorable results for the firm. See ThinkAdvisor, “SEC Examiners Turn Up the Heat on Marketing Rule Compliance”