‘Next Steps’ for Advertising Rule Coming: SEC Official

The Securities and Exchange Commission’s Division of Investment Management plans to recommend “next steps” on some outstanding proposals — namely long-awaited changes to the investment advisor advertising and solicitation rule — sometime this year, according to the agency’s investment management director, Dalia Blass.

At the Practising Law Institute’s Investment Management Institute event on July 28, Blass also stated that two potential 1940 Act-registered fund structures could provide “enhanced access to private investments”: target date funds and closed-end funds of private funds.

“Target date funds could, for example, invest in private markets as a way to diversify risk and potentially enhance portfolio returns,” she said. “At the same time, private investments would be capped to 15% of the fund’s portfolio.”

As to closed-end funds, the division is reexamining whether to make those with more than 15% of assets in private investments more accessible to retail investors, she said.

Ad Rule Comments

Blass stated at the Investment Adviser Association’s compliance event in early March that the agency was still digesting the comments that have come in regarding the definition of advertising — the scope — and “the compliance review aspect of the proposal” as well as “where those two areas can present potential problems.”