SEC Eases Marketing Rule Performance Requirements
SEC Eases Marketing Rule Performance Requirements on Wednesday. The SEC updated some of the more complex performance requirements in its Marketing Rule that industry firms have grappled with three years after the regulation took effect.
The updates were “highly anticipated” and allow firms to display gross performance without having to show net calculations when showing a subset of investments, as long as certain criteria are met, Cynthia Kelly, a senior compliance consultant at STP Investment Services, told FundFire in an email.
“This ensures transparency and balanced disclosure while acknowledging the impracticality of calculating net performance for extracted data,” she said.
The agency issued new guidance in two areas of a frequently asked questions document, one of which scrapped a requirement that asset managers show both gross and net performance when highlighting the results of a subset of investments from a portfolio, known as extracted performance.
Read more of what Cynthia had to say to FundFire here.
