The North American Securities Administrators Association (NASAA) is proposing marketing rule changes for investment advisors that would permit testimonials, endorsements, third-party ratings, and performance reports as long as certain regulatory standards are met.
NASAA is proposing the changes so that its rules more closely align with the Securities and Exchange Commission investment adviser marketing rule (Rule 206(4)-1), which was amended in 2020 to allow such advertising.
“These proposed amendments reflect NASAA’s efforts to provide a model for updates to state investment adviser advertising rules based in part on changes made by the SEC to marketing rules for SEC-registered advisers,” said NASAA President Leslie Van Buskirk.
NASAA is seeing public comment on its proposed amendments on or before August 28.
“We look forward to hearing from stakeholders on this updated proposal. NASAA remains committed to ensuring that investors receive the protections they deserve and to encouraging uniform regulatory standards for state-registered investment advisers,” said Stephen Brey, Chair of the NASAA Investment Adviser Section and Co-Chair of the Regulatory Section Policy and Review Project Group.
In its request for public comment, NASAA said some of its members continue to believe that some marketing activities conditionally permitted by the SEC Marketing Rule should remain prohibited. However, most members and its Project Group believe consistency among state and federal securities laws is paramount.
“With that in mind, the Project Group recommends that the existing model rule on investment adviser advertising be amended to remove any prohibitions that would be permissible under the SEC Marketing Rule,” it said.
