ANALYSIS: SEC Marketing Rule Says Adviser Ad Ratings Are Now OK

The SEC’s Marketing Rule expressly permits investment advisers to use third-party ratings in their advertising—provided they comply with certain requirements. Those prerequisites exist because the SEC is concerned about preventing fraudulent, deceptive, and manipulative practices by advisers.

Third-party ratings can influence consumer behavior, and the SEC took this into account when the agency in December 2020 folded its existing advertising and solicitation rules into an amended Rule 206(4)-1 (commonly known as the “Marketing Rule”).

The amended Marketing Rule defines third-party ratings as ratings provided by a person without a connection to the adviser as part of their business. These ratings ...