SEC Provides Guidance on IAA Marketing Rule

The SEC updated its FAQ guidance on investment adviser marketing since the adoption of amendments to Advisers Act Rule 206(4)-1 (the "Marketing Rule").

The SEC highlighted the following:

• Compliance Date: An adviser cannot choose to comply partially with the amended marketing rule before the compliance date of November 4th, 2022. They must either adhere to the rule in its entirety from the effective date of May 4th, 2021 or continue following the previous advertising and cash solicitation rules until they can fully adhere to the rule.
• Time Period Requirement: Advisers are allowed to use interim performance information in advertisements if they cannot calculate their one-, five-, and ten-year performance data immediately following a calendar year-end, as long as this interim information is as current as possible and updated to the required calendar year-end data within a reasonable period, generally not exceeding one month. This interim information must comply with the other provisions of the marketing rule.
• Gross and Net Performance: When an adviser to a private fund displays the gross performance of a single investment or a group of investments, it is also required to also show the net performance.
• Calculating Gross and Net Performance: Gross and net performance must be calculated using the same methodology and over the same time period.