The Securities and Exchange Commission approved Monday new Financial Industry Regulatory Authority rules allowing capital acquisition brokers to engage in distribution and solicitation activities for RIAs consistent with the anti-pay-to-play rules.
The rules become effective on Dec. 6.
Rule 206(4)-5 of the Investment Advisers Act restricts advisors from engaging solicitors for certain government entities.
“The new rules allow advisors to retain CABs consistent with previously adopted FINRA rules governing distribution and solicitation activities,” explained Cipperman Compliance Services.
The newly approved rules “allow government plan solicitors to continue their activities on behalf of RIAs by submitting to the lighter CAB regulatory regime,” and represent “a loosening of the rules that appeared very restrictive in the wake of Rule 206(4)-5’s adoption,” Cipperman added.