SEC Adopts Modernized Advertising Rule for IAs

On December 22, 2020, the Securities and Exchange Commission (“SEC”) announced that it had adopted a new, single rule to replace its current advertising and cash solicitation rules, which had remained largely unchanged since their adoption several decades ago.

Among other changes, the amended Marketing Rule (the “Rule”) allows advisors to use testimonials and endorsements, subject to certain conditions.

The Rule also addresses the evolution of technology and markets in various ways. For example, the revised definition of advertising references any direct or indirect communication by an advertiser, with the goal of encompassing communications through emails, texts, instant messages, podcasts, social media, etc.

SEC Adopts Modernized Advertising Rule for IAs