Political Contributions by Certain Investment Advisers

The Securities and Exchange Commission is proposing to rescind rule 206(4)-5 under the Investment Advisers Act of 1940, which prohibits investment advisers from providing advisory services for compensation to a government client for two years after a contribution to certain elected officials or candidates. The proposal takes into account implementation challenges associated with the rule that have resulted in unintended consequences and the view that the existing requirements of the Advisers Act and its rules are likely sufficient to address pay-to-play practices. The proposal also would amend the Advisers Act books and records rule consistent with the proposed rescission.