In mid-December, the SEC adopted an amended rule to the advisor advertising rule and cash solicitation rule to reflect market developments and regulatory changes since the advertising rule’s adoption in 1961 and the cash solicitation rule’s adoption in 1979. These amendments will be the first substantive change to either rule since their inception and will create a new merged rule, The Marketing Rule, that will replace both the current advertising and cash solicitation rules.
Originally, the advisor advertising rule and cash solicitation rule were designed mainly for media such as television, radio, and newspapers. But a lot has changed since 1961 with the evolution of advertising and referral practices, advancements in technology, the introduction of the internet, and more. The Commission recognized this, stating that the new rule recognizes these changes and will “contain principles-based provisions designed to accommodate the continual evolution and interplay of technology and advice”. A few notable outcomes from this are the new rule applying to online outreach, such as adviser marketing over social media, and allowing for testimonials and endorsements.