SEC Issues No-Action Relief to Investment Advisers Regarding Cash Payments for Client Solicitations (with Lofchie Comment)

The SEC issued a no-action letter stating that it will not take action against any investment adviser who is registered pursuant to Advisers Act Section 203 ("Registration of Investment Advisers") and pays to Ms. Stephanie Hibler a cash solicitation fee for the solicitation of advisory clients in accordance with Rule 206(4)‑3 ("Cash Payments for Client Solicitations"). The no-action relief applies notwithstanding an SEC administrative order that would have otherwise precluded such an investment adviser from paying the fee to Ms. Hibler.

Lofchie Comment: While waivers of the disqualification provisions of Rule 206(4)‑3 are fairly common, this waiver letter is unusual in that it is being provided to the solicitor rather than the adviser paying the solicitation fee.

See: SEC Letter; Incoming Letter.