Initial Observations Regarding Advisers Act Marketing Rule Compliance

The Division of Examinations is publishing this Risk Alert to share preliminary observations from examinations of investment advisers’ compliance with the Marketing Rule. The Division continues to focus on compliance with the Marketing Rule. The Risk Alert encourages accurate completion of the Marketing Rule items contained in Form ADV and compliance with the Compliance Rule, the Books and Records Rule and the Marketing Rule’s General Prohibitions.

The Risk Alert details observations of investment adviser compliance with (1) the Compliance Rule, (2) the Books and Records Rule, and (3) the General Prohibitions of the Marketing Rule. With respect to the Marketing Rule’s General Prohibitions, the Risk Alert provides observations of deficiencies related to the following: (1) untrue statements of material fact and unsubstantiated statements of material fact; (2) omission of material facts or misleading inference, (3) fair and balanced treatment of material risks or limitations, (4) references to specific investment advice that were not presented in a fair and balanced manner, and (5) inclusion or exclusion of performance results or time period in matters that were not fair and balanced.

View the Risk Alert: Initial Observations Regarding Advisers Act Marketing Rule Compliance