New SEC marketing rule looms large among investment advisers’ compliance concerns

The SEC’s new marketing rule is the biggest compliance concern among compliance officers at investment adviser firms for a second consecutive year, according to an annual survey released this month.

The 2022 Investment Management Compliance Testing Survey found that 78.5 percent of respondents named advertising/marketing as the “hottest” compliance topic for this year. The survey is jointly backed by ACA Group, Yuter Compliance Consulting and the Investment Adviser Association.

Meanwhile, the importance of advertising/marketing jumped by around 20 percentage points versus last year. The trailing topics included cybersecurity (66.9 percent); ESG/sustainability (50.5 percent); and conflicts of interest (32.8 percent).

ACA said compliance officers from 425 IA companies participated in the survey, 60 percent of which stated their firms advise private funds.

Marketing rule readiness

Most respondents (68.7 percent) said they will follow the marketing rule by or close to its November 4 compliance date, with a further 10.9 percent already abiding by it. Meanwhile, 16.3 percent responded that they “are gearing up to comply well in advance of the compliance date.” Only 4.2 percent said that they were “unsure.”

Compliance officers were asked about which policies and procedures their firms would either revise, or had already done so, due to the marketing rule. The most frequently cited ones included process for reviewing marketing materials (61.7 percent); training (56.6 percent); and testing and annual reviews (41.0 percent).

Attendees at PEI’s Private Funds Compliance Forum in May weighed in on preparation for the marketing rule, Private Funds CFO recently reported, with the rule’s ambiguities cited, along with updating policies and procedures.

The SEC has not issued new guidance for the marketing rule in 16 months after releasing two FAQs, affiliate title Regulatory Compliance Watch reported earlier this month.