Although the compliance date for the SEC’s new marketing rule pursuant to Rule 206(4)-1 under the Investment Advisers Act of 1940 (Marketing Rule) passed several months ago, the sweep exams foreshadowed by SEC staff have not been initiated yet. Instead, on January 11, 2023, the SEC’s Division of Investment Management released its Marketing Compliance Frequently Asked Questions (FAQ) to provide some guidance on issues arising from advisers’ early efforts to comply with the Marketing Rule. To address some of the challenges involved in interpreting and implementing the Marking Rule, K&L Gates and the CFA Institute hosted a webinar featuring K&L Gates partner Pamela A. Grossetti, Dechert partner Michael W. McGrath, and CFA Institute senior head Karyn D. Vincent. This first article in a two-part series provides an overview of the FAQ, its guidance for advertising individual positions and what it portends for handling issues of attribution going forward. The second article
forecasts the practical implications of the FAQ and details a Q&A with compliance professionals about bespoke issues when attempting to comply with the Marketing Rule. For further commentary from McGrath, see our two-part series: “Key Differences Between U.S. and U.K. Marketing Rules and Tips for Dual Compliance
” (Oct. 18, 2022); and “Reconciling Disparate U.S. and U.K. Requirements for Preparing and Delivering Non-Standard Track Records
” (Oct. 25, 2022).