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ARTICLE · 20 JUNE 2012

SEC Extends Compliance Date On Pay To Play Solicitor Ban

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On June 8, 2012, the Securities and Exchange Commission ("SEC") released amendments to Rule 206(4)-5 (the "Pay to Play Rule") under the Investment Advisers Act of 1940 (the "Advisers Act"), which extends the date on which covered advisers must comply with the ban on payment to certain third party solicitors.

United StatesFinance and Banking
Jeffrey Collins
Jeffrey Collins
Robert Sawyer
Robert Sawyer
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On June 8, 2012, the Securities and Exchange Commission ("SEC") released amendments to Rule 206(4)-5 (the "Pay to Play Rule") under the Investment Advisers Act of 1940 (the "Advisers Act"), which extends the date on which covered advisers must comply with the ban on payment to certain third party solicitors.

The Pay to Play Rule prohibits covered advisers from engaging any third party to solicit government entities on behalf of the advisor, unless such third party is a "regulated person" and is subject to rules governing pay-to-play practices that are determined by the SEC to be at least as stringent as the Rule and consistent with the objectives of the Rule. "Regulated persons" include: (i) SEC registered investments advisers, (ii) SEC registered broker-dealers that are members of FINRA, and (iii) "municipal advisors," defined as a person registered as such pursuant to Section 15B of the Securities Exchange Act of 1934 and subject to the rules of the

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