SIFMA as part of a joint industry letter provides comments to the Office of the Comptroller of the Currency, Federal…
Investment Adviser Advertisements in Investment Advisers Act Release
Ms. Vanessa A. Countryman
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Re: Investment Adviser Advertisements; Compensation for Solicitations, Investment Advisers Act Release No. 5407; File Number S7-21-19
Dear Ms. Countryman:
The Asset Management Group (“AMG”) of the Securities Industry and Financial Markets Association (“SIFMA”) appreciates the opportunity to provide our comments to the Securities and
Exchange Commission (“SEC” or “Commission”) on the proposed changes to the rules governing investment adviser advertisements in Advisers Act Release No. 5407 (Nov. 4, 2019) (the “Proposing Release”).1 SIFMA has reviewed and generally endorses the views and opinions in this letter.
2 SIFMA AMG is the voice for the buy-side within the securities industry and broader financial markets, which serve millions of individual and institutional investors as they save for retirement, education, emergencies, and other investment needs and goals. Our members represent U.S. asset management firms whose combined global assets under management exceed $34 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.
The Proposing Release updates two rules under the Investment Advisers Act of 1940 (“Advisers Act”) that govern how investment advisers advertise their services and solicit clients. The
comments below relate to the proposed amendments to Advisers Act Rule 206(4)-1 (the “Advertising Rule” or the “Proposed Rule”). The proposed changes to the Advertising Rule
represent the Commission’s first substantive update to the framework for advertisements since 1961. We understand that the proposed amendments are intended to modernize the Advertising Rule based on developments in technology, the changing profiles of federally registered investment advisers, and the Commission’s experience administering the current rule.
SIFMA AMG supports the Commission’s objective of modernizing the Advertising Rule and moving away from per se violations, including on testimonials and past specific recommendations, in favor of a more principles-based approach to regulating advertisements. At the same time, however, the Proposed Rule introduces a number of legal and practical implications that we urge the Commission to consider in the rule making process. We list our comments below chronologically in the order in which they appear in the Proposing Release; however, we wish to highlight the following areas: