These past few weeks, the SEC has charged 10 firms with violating the New Marketing Rule (NMR), and each of the firms charged share a common error: advertising hypothetical performance without establishing and implementing the required internal “policies and procedures reasonably designed to ensure that the performance is relevant to the likely financial situation and investment objectives of the intended audience.”
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Entries by Kim Cash
The June 8 SEC Risk Alert isn’t a window into findings-to-date, nor a much-anticipated list of best practices offering clarification. It is a solid overview of areas at your firm likely impacted by the new Marketing Rule (NMR).
CFA Institute released third-party assurance standards for firms claiming compliance with its Global ESG Disclosure Standards for Investment Products (the “Standards”). As controversy over the proposed SEC ESG Rule grows, it’s important to understand the CFA Institute’s voluntary framework and assess the benefits of voluntary compliance and assurance on a firm’s investment products, as well as the similarities and differences in proposed regulations.
RIAs across the country are preparing year-end 2022 performance presentations, and for most GIPS compliant firms, it’s time to update annual performance on your GIPS Reports. Or is it? Below are four timely Q&As as we kick-off annual verifications and performance examinations.
Exploring and Documenting Consistent Investment Performance Calculation Methodologies When trying to understand the limits of the SEC Marketing Rules requirements for consistent related account performance calculation methodologies, advice circulating that […]
Hypothetical performance will be prohibited beginning November 4, 2022, unless the advisor takes specific steps to address its potentially misleading nature. The SEC’s goal with this portion of the rule is to ensure that advertisements containing hypothetical performance are only distributed to investors who have the financial expertise and resources to interpret the data and understand the risks and limitations of these types of presentations.