SEC Proposes a Principles-Based Advertising Rule for the Way Investment Advisers Live Now (November 2019)
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Introduction
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On the day the US Securities and Exchange Commission adopted Rule 206(4)-1 under the Investment Advisers Act of 1940, as amended, President John F. Kennedy arrived in New York City to support the flagging reelection campaign of Mayor Robert F. Wagner Jr., the Pentagon urged a resumption of atmospheric nuclear testing by the United States following the Soviet Union’s detonation of the 50 megaton “Tsar Bomba” two days earlier, and state and local officials across the American South openly defied a Federal order to end racial segregation of US interstate bus and rail facilities.
A lot has changed in the last 58 years, not the least of which are investor expectations, market practice and communications technology in the investment advisory sector. On Nov. 4, 2019, the SEC proposed amendments that would comprehensively modernize the Advertising Rule and make it relevant to a 21st-century industry replete with private funds, institutional clients and investors, websites, social media and robo-advisers.
