Securities Compliant Marketing

In 2020, the The Securities and Exchange Commission (SEC) marketing compliance rules were updated for the investment advisor marketing industry. The SEC makes the marketing rules and regulations that companies must adhere to. Organizations that should comply with these standards work or operate in:

  • Securities industry (including investment advisors and companies, and brokers)
  • Municipal advisors
  • Mutual funds
  • Participants or members of Systems Compliance and Integrity entities who obtain information about particular events

The government carefully monitors the actions and progress of these mentioned entities at criminal, federal, civil, self-regulatory, regulatory, and state levels. Without a doubt, SEC regulations are strict and thorough. But, these compliance rules protect investors from fraud and scams.

SEC Compliant
SEC Compliant
SEC Compliant
SEC Compliant

General SEC Guidelines

It is important to have some general guidance on the critical considerations of the compliance regulations set by the SEC for creating marketing material. However, to ensure that your marketing efforts comply entirely, you should directly work with a compliance department. For example, in particular cases, organizations prohibit messaging, social media platforms, WeChat, WhatsApp, etc., for business-related conversations with clients or customers. This is why it is important to work with a compliance team to identify what you can and can not use for advertising and communication. The basic guidelines include:

  • All communications should not omit material information. They should be balanced, complete, and fair.
  • Unsubstantiated, misleading, false claims or exaggerations are strictly prohibited.
  • Communications may not define or predict performance (with specific expectations).
  • Statements used should be clear and precise, while providing a balance between potential risks and potential benefits.
  • All communication must be appropriate for the customer or audience.
  • Necessary disclaimers should be included.
  • All sources should be determined and laid out.

What to Expect with SEC Audits

The SEC undergoes audits of investment advisers and organizations to ensure they comply with the set regulations. A negative audit can lead to disciplinary action, consumer mistrust, deficiency letter, etc.

During the audit, the SEC personnel will ask for (but are not limited to):

  • Pricing and quotation lists.
  • Clients lists, including asset values and account types.
  • Lists of trades.
  • Copies of sales journals and purchase.

Trying to make sure your organization is adhering to these specific guidelines can be overwhelming. That’s where we can help! Our seasoned team of compliance experts can make sure your materials are following all the rules and regulations needed.

SEC Compliant

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