SEC Marketing Rule: What Fintechs Need to Know

The SEC's Marketing Rule (Rule 206(4)-1) significantly changed how investment advisers can advertise. If your fintech offers investment advice, here's what you need to know.

Key Changes

Testimonials & Endorsements

Now permitted with:

• Required disclosures
• Compensation disclosure
• Conflict of interest disclosure

Performance Advertising

More flexibility with:

• Hypothetical performance (with conditions)
• Predecessor performance
• Extracted performance

General Prohibitions

Still prohibited:

• Material misstatements
• Unsubstantiated claims
• Cherry-picking
• Misleading implications

Compliance Requirements

Written Policies

You need policies covering:

• Review and approval processes
• Disclosure requirements
• Recordkeeping
• Social media

Substantiation

Before dissemination:

• Document reasonable basis
• Maintain supporting materials
• Review assumptions

Books and Records

Maintain records of:

• All advertisements
• Questionnaires/surveys
• Performance calculations
• Approvals

Practical Tips

1. Audit existing materials against new requirements
2. Update policies to address new provisions
3. Train staff on compliant marketing
4. Document everything for examination readiness

Conclusion

The marketing rule offers more flexibility but requires more documentation. Build compliance into your marketing workflow from the start.

Use our Marketing Agent for AI-powered marketing compliance review.