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SEC Releases Information Update to Align Existing Staff Letters with New Adviser Marketing Rule

By Robert R. Boeche, Partner of Shustak Reynolds & Partners, P.C. posted on Monday, November 22, 2021.

Robert R. Boeche II

Robert R. Boeche II


Location: San Diego, California
Phone: (619) 696-9500 (Ext. 122)
Direct: (619) 546-5502
Email: [email protected]

As discussed more fully in our earlier article, the Securities Exchange Commission (“SEC”) adopted its new Marketing Rule on December 22, 2020. The new Marketing Rule effectively merged two sets of rules to create a new paradigm that modernizes adviser marketing. Consequently, most of the SEC’s previous decisions and guidance on cash solicitation and advertisement have become outdated. The SEC’s adopting release indicated that the staff no-action letters which address cash solicitors and advertisement would be nullified.[i] However, it was not immediately clear which of the hundreds of staff statements and no-action letters on the two topics would be withdrawn or modified to support the new paradigm in adviser marketing.

Advertising and Cash Solicitor Letters Withdrawn

In October 2021, the SEC released an “Information Update” intended to clarify exactly which staff letters will no longer apply. In total, a list of 203 staff letters will be withdrawn or modified to align the existing body of staff guidance with the new Marketing Rule.[ii] The withdrawn staff letters date from 1971 to 2017 and represent the same broad array of issues the new rule intends to tackle in a modern way.  Well- known staff letters to be withdrawn include those relating to Clover Capital Management, Franklin Management, Inc., The TCW Group, and Mayer Brown LLP (among many others).

It is common for the SEC’s staff to issue guidance in the form of no-action letters and staff statements. These letters do not hold the force of law, as they are not themselves rules or regulations. However, staff letters are relied upon heavily by securities professionals for clarity in the application of the securities laws that constrain their practice.[iii] Mindful of this reliance, the SEC has released its information update with plenty of time to spare before the new Marketing Rule and the subsequent staff letter withdrawals go into effect on November 4, 2022.

If you have questions about the new Marketing Rule and how it could affect your practice, we are here to help.
Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many broker-dealers, registered representatives, investment advisors, investors, and businesses.
Attorney Robert R. Boeche can be reached in the firm’s San Diego office at (619) 696-9500.

[i] Investment Adviser Marketing, Release No. IA-5653 (Dec. 22, 2020) (“Marketing Rule Adopting Release”).

[ii] Division of Investment Management Staff Statement Regarding Withdrawal and Modification of Staff Letters Related to Rulemaking on Investment Adviser Marketing, Release No. IM-INFO-2021-10 (October 2021).

[iii] Rulings, interpretations, and opinions of administrative staff constitute a “body of experience and informed judgement to which courts and litigants may property resort for guidance.” Skidmore v. Swift & Co., 323 U.S. 134, at 140 (1944).

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