SEC Marketing Rule
17 CFR § 275.206(4)-1, broken down section by section
One page per cited sub-paragraph: the rule text, the common ways advertisements run afoul of it, and concrete compliant rewrites. Built from the same corpus the Safe to Publish reviewer uses on every draft.
General prohibitions (7)
Seven categories of conduct prohibited in any advertisement.
- (a)(1)General prohibition: untrue statements / material omissions
- (a)(2)General prohibition: lack of reasonable basis for material statements of fact
- (a)(3)General prohibition: misleading implications or inferences
- (a)(4)General prohibition: discussion of benefits without fair/balanced discussion of risks/limitations
- (a)(5)General prohibition: references to specific investment advice that are not fair and balanced
- (a)(6)General prohibition: performance results that are not fair and balanced
- (a)(7)General prohibition: otherwise materially misleading advertisements
Testimonials and endorsements (7)
Disclosures, oversight, written agreements, and ineligible-person prohibitions.
- (b)(1)(i)(A)Testimonial/endorsement: required disclosure of client / non-client status
- (b)(1)(i)(B)Testimonial/endorsement: required disclosure of compensation (cash or non-cash)
- (b)(1)(i)(C)Testimonial/endorsement: required disclosure of material conflicts of interest
- (b)(1)(ii)Testimonial/endorsement: additional disclosures (material terms of comp, conflicts) at time of dissemination
- (b)(2)Testimonial/endorsement: clear and prominent disclosure of (b)(1)(i) at time of dissemination
- (b)(3)Testimonial/endorsement: adviser oversight and written agreement requirement
- (b)(4)Testimonial/endorsement: prohibition on compensating ineligible (disqualified) persons
Third-party ratings (1)
Due-diligence and disclosure requirements for ratings used in marketing.
Performance advertising (7)
Gross vs. net, prescribed time periods, related, extracted, hypothetical, and predecessor performance.
- (d)(1)Performance: gross performance must be presented with net performance
- (d)(2)Performance: standardized 1-, 5-, and 10-year time periods (non-private-fund)
- (d)(3)Performance: prohibition on representations that SEC has approved or reviewed any calculation/presentation
- (d)(4)Performance: related performance must include all related portfolios
- (d)(5)Performance: extracted performance must provide / offer the total portfolio performance
- (d)(6)Performance: hypothetical performance — policies, info needs, conditions/limitations
- (d)(7)Performance: predecessor performance — substantially similar accounts, key personnel transferred
Definitions (5)
Statutory definitions of advertisement, testimonial, endorsement, and others.
Run any of these on your own marketing copy.
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