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SEC Extends Compliance Date for Ban on Third Party Solicitations by Investment Advisers

By | June 8, 2012

The SEC has extended 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, which is known as the “pay to play” rule. The SEC extended 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 was 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. Once that final rule is adopted, the SEC will issue the new compliance date for the ban on third-party solicitation in a notice in the Federal Register.

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