The Advertising Rule
The AIC urges the SEC to modernize the Advertising Rule to better meet the demands of the 21st century.
The SEC’s Advertising Rule (Rule 206(4)-1), which has not been amended since its adoption in 1961, was designed to address advertising practices generally used by an investment adviser with respect to retail clients. The Rule places limitations on the ability of private equity fund sponsors to present case studies and other relevant information or references from investors, even though advisers are still subject to liability for false or misleading statements to investors or prospective investors under IAA Rule 206(4)-8 and other provisions of the federal securities laws. The AIC understands that the SEC will be addressing the Advertising Rule as part of its long-term agenda and we look forward to engaging with SEC staff on this issue.