The Securities and Exchange Commission’s Division of Investment Management will consider on Tuesday whether to propose amendments under the Advisers Act of 1940 to rules that prohibit certain investment-advisor advertisements and payments to solicitors.
The SEC Advertising Rule “hasn’t been significantly amended since 1961 — long before social media, long before the internet, even before fax machines,” Karen Barr, president and CEO of the Investment Adviser Association, told ThinkAdvisor in an email late Friday.
“We’ve been urging the SEC to update the rule for nearly 20 years,” Barr explained. “Advancements in technology and communications have drastically changed the ways that every service provider in our economy engages with clients and prospective clients.”
The “badly outdated rule” generally prevents advisors “from using communications and marketing methods that long ago became standard business practice elsewhere in the economy,” she added.