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ARTICLE · 17 APRIL 2025

SEC Issues New Guidance On Marketing Rule

Rich May, P.C.
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On March 19, 2025, the U.S. Securities and Exchange Commission (the "SEC") updated its Q&A guidance on Rule 206(4)-1 (the "Marketing Rule") of the Investment Advisers Act of 1940...

United StatesMedia, Telecoms, IT, Entertainment
Diana Alsabe
Diana Alsabe
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On March 19, 2025, the U.S. Securities and Exchange Commission (the "SEC") updated its Q&A guidance on Rule 206(4)-1 (the "Marketing Rule") of the Investment Advisers Act of 1940 (the "Advisers Act"). The updated Q&A guidance provides SEC-registered investment advisers with greater flexibility in presenting performance results in advertisements. The SEC's updated interpretation of the Marketing Rule addresses challenges advisers previously faced regarding the presentation of extracted performance and performance-related advertising in a private fund or other portfolio.

Extracted Performance: Gross vs. Net Presentation

The SEC defines "extracted performance" as displaying the performance of one investment or a group of investments in a private fund or portfolio. Previously, the SEC has taken the position that an adviser may not present any gross performance in advertisements unless it includes the net performance with equal prominence, and calculates the net

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