Picture of the SEC building (Photo: AP)

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The “badly outdated rule” generally prevents advisors “from using communications and marketing methods that long ago became standard business practice elsewhere in the economy,”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.

In the IAA’s comment letters and communications with SEC Commissioners and staff, the organization “has asked the Commission to take a principles-based approach to modernizing the rule,” Barr said. “We believe the Commission should draft new regulations that are high-level and flexible enough to adapt as technology and business practices continue to evolve.”

Grateful that the SEC is “finally addressing” the Advertising Rule modernization, she noted that IAA looks forward “to providing feedback on the coming rule proposal.”

Dalia Blass, head of the SEC’s IM Division, said earlier this year that she anticipated the division would present “recommendations for a proposal on modernizing the advertising and solicitation rules” for investment advisors soon.