What You Need to Know
- The rule becomes effective May 4.
- Industry officials had wondered if the SEC would voluntarily comply with Biden's regulatory freeze.
- The rule, approved in December, allows advisors to use testimonials.
The Securities and Exchange Commission’s final rule on registered investment advisors’ advertising and marketing practices was published in the Federal Register Friday — setting in motion a May 4 effective date.
RIAs have 18 months to come into compliance with the new rule.
The SEC passed the ad rule changes in late December. The rule allows advisors to use testimonials and endorsements, which include traditional referral and solicitation activity, subject to certain conditions.
The amendments create a merged rule that will replace both the current advertising and cash solicitation rules.
Karen Barr, president and CEO of the Investment Adviser Association, told ThinkAdvisor Friday in an email that publication “means the rule won’t be delayed for further review, and investment advisors now have a firm compliance deadline of Nov. 4, 2022,” with 18 months to modernize their marketing and advertising programs.