SEC Division of Examinations Issues Risk Alert on Marketing Rule Deficiencies

Last week, the Securities and Exchange Commission’s Division of Examinations (“DOE”) issued a Risk Alert (the “Alert”) entitled “Initial Observations Regarding Advisers Act Marketing Rule Compliance.” The Alert describes several common deficiencies observed by DOE staff regarding registered investment advisers’ compliance with the recently revised Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (“Advisers Act”). The examples identified include deficiencies with respect to an adviser’s (i) Marketing Rule–related compliance policies under Advisers Act Rule 206(4)-7 (the “Compliance Rule”); (ii) Marketing Rule–related recordkeeping under Advisers Act Rule 204-2 (the “Books and Records Rule”); and (iii) the Marketing Rule’s “General Prohibitions.”