SEC headquarters in Washington SEC headquarters in Washington. (Photo: Diego Radzinschi/ALM)

The Securities and Exchange Commission dropped from its Wednesday open meeting agenda its plan to adopt long-awaited changes to the Investment Advisers Act advertising rules.

Also tabled were considerations to adopt amendments to Form ADV to provide the commission with more information about advisors’ marketing practices, and corresponding amendments to the books and records rule under the Advisers Act.

The changes were thought to be coming before the commission in October as well, but didn’t.

The Division of Investment Management plans to recommend that the commission adopt amendments to rules 206(4)-1 and 206(4)-3 under the Investment Advisers Act of 1940 regarding marketing communications and practices by investment advisors.

The Investment Adviser Association’s annual Evolution Revolution report, released in mid-November, found that advisors with at least one social media platform or website continued to increase, going to 12,047 in 2020 from 11,538 in 2019.

The advertising rule has hampered advisors’ use of social media to attract clients, the report states. “Almost all social media posts are subject to the SEC’s stringent” advertising rule, which hasn’t been materially changed since its adoption in 1961, the report states.

As it stands, the advertising rule prohibits or restricts client testimonials, references to past specific profitable investment recommendations, and portfolio performance without substantial disclosure, according to IAA.

— Check out Human Capital: IAA’s Karen Barr on SEC Rules Nearing the Finish Line on ThinkAdvisor.