The New Marketing Rule: A Focus on Performance
The long-awaited modernization of the Security and Exchange Commissions’ (SEC) Rule 206(4)-1 (Marketing Rule) under the Investment Advisers Act of 1940 was added to the Federal Register on 5 March 2021. The majority of changes that a firm will need to make in order to comply with the new rule are performance related.
ACA and K&L Gates hosted a detailed explanation of the specific performance requirements, how they differ from prior no-action letters, and what steps a firm should take now in order to be ready by the deadline.
In particular, the webcast addressed:
- Terminology – Definitions of the terms used by the SEC
- Key considerations – Which changes should you be focusing on now?
- Related, extracted, hypothetical, and portable performance
- Net of fees – What fees should be reduced to get net returns?
- Overlap with the GIPS® standards