The Securities and Alternate Fee’s concentrate on the brand new Advertising Rule continues, with the company releasing Wednesday a brand new threat alert detailing bother spots it’s seeing in exams.
The threat alert, launched by the Division of Examinations, shares preliminary observations to encourage correct completion of the Advertising Rule objects contained in Kind ADV and to advertise compliance with Advisers Act Rule 206(4)-7 (the Compliance Rule), in addition to Advisers Act Rule 204-2 (the Books and Data Rule) and the Advertising Rule’s Normal Prohibitions.
Sanjay Lamba, affiliate common counsel for the Funding Adviser Affiliation in Washington, mentioned that whereas the chance alert “focuses on compliance with the Rule’s principles-based common prohibitions and associated recordkeeping and Kind ADV disclosure obligations,” because the SEC workers notes, “lots of the deficiencies described on this Threat Alert might also be deficiencies underneath different elements of the Advertising Rule.”
The danger alert comes on the heels of the SEC’s focused sweep of advisors’ Advertising Rule compliance, which has resulted in penalties being levied.
On April 12, the SEC settled expenses with 5 registered funding advisors for Advertising Rule violations. All 5 companies agreed to settle the SEC’s expenses and to pay $200,000 in mixed penalties.
In September 2023, the SEC charged 9 advisory companies with Advertising Rule violations as a part of the continuing sweep.
Learn the gallery to see the difficulty spots the company lays out within the Threat Alert that advisors ought to take note of.