SEC Final Rule: Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Extension of Compliance Date

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Gavel.png FINAL RULE: approved on June 13, 2012
Political Contributions by Certain Investment Advisers, SEC
Final Rule Issue Effective Date Compliance Date
June 13, 2012 June 11, 2012 TBA*

On June 13, 2012, the Federal Register published a final SEC rule that extends the date by which advisers must comply with the ban on third party solicitation in rule 206(4)–5 under the Investment Advisers Act of 1940, the ‘‘pay to play’’ rule. The Commission is extending the compliance date in order to ensure an orderly transition for advisers and third-party solicitors as well as to provide additional time for them to adjust compliance policies and procedures after the transition.

The compliance date for the ban on third-party solicitation is extended until nine months after the compliance date of a final rule adopted by the Commission by which municipal advisor firms must register under the Securities Exchange Act of 1934.[1]

Background

Not long after the Pay to Play Rule was adopted in 2010, Congress created a new category of registrants called ‘‘municipal advisors’’ in the Dodd-Frank Act. The statutory definition of municipal advisor includes persons that undertake ‘‘a solicitation of a municipal entity.’’ In September 2010, the SEC adopted an interim final rule establishing a temporary means for municipal advisors to satisfy the registration requirement.

References

  1. Political Contributions by Certain Investment Advisers: Ban on Third-Party Solicitation; Extension of Compliance Date. Federal Register. Retrieved on June 14, 2012.

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