On August 6, 2024, the CFA Institute released its much-anticipated industry survey report on the SEC Marketing Rule Compliance Practices. The survey, which was conducted by the CFA Institute United States Investment Performance Committee (USIPC) in conjunction with the Investment Advisors Association (IAA), solicited feedback from 189 firms in the industry regarding the implementation of the SEC Marketing Rule.
As a reminder, the SEC Marketing Rule became effective in May 2021 and all advisers were required to comply with the rule by November 2022. Since the required implementation date, there have been a few clarifications made by the SEC staff in the form of FAQs. Despite these efforts, the industry still seems to be struggling with the interpretation of certain parts of the rule.
The survey aimed to gain an understanding of the current practices among industry participants as it relates to certain performance requirements under the SEC Marketing Rule that have been the source of some confusion. Topics covered by the survey include fees, prescribed time periods, definition of performance, investment-level net return calculations, databases, and hypothetical performance.
You can find a full copy of the survey results here.
If you have any questions about this information or would like to discuss your firm’s valuation needs, please contact us.
