Joot Blog

Stay up to date with perspectives, news and updates pertaining to investment management technology, legal, compliance and more.

5 Stars: Third-Party Ratings and the New SEC Marketing Rule

Jul 27, 2021 2:58:04 PM / by Karen Mauk posted in SEC, SEC Rule, SEC Updates, Compliance

Confused about how the new SEC marketing rule differentiates between third-party ratings, testimonials, and endorsements? Get some clarity here.

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Reality Check: Hypothetical Performance and the New SEC Marketing Rule

Jul 13, 2021 3:29:54 PM / by Charles Black posted in SEC, SEC Rule, SEC Updates, Compliance

Need help understanding what types of hypothetical performance are permitted by the new SEC marketing rule? Read on.

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Performance Advertising and the New SEC Marketing Rule

Jun 29, 2021 12:45:00 PM / by Karen Mauk posted in SEC, SEC Rule, SEC Updates, Compliance

Learn about the requirements and restrictions for performance advertising under the new SEC marketing rule.

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Thumbs-Up: Testimonials, Endorsements, and the New SEC Marketing Rule

Jun 15, 2021 7:30:00 AM / by John Williams posted in SEC, SEC Rule, SEC Updates, Compliance

Confused about which testimonials and endorsements the new SEC marketing rule permits? Get the plain facts here.

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Leveraging Technology with the New SEC Marketing Rule

May 18, 2021 3:17:50 PM / by Bo J. Howell posted in SEC, SEC Rule, SEC Updates, Artificial Intelligence, Compliance Technology

Our last post on the new SEC marketing rule covered some basics, including the newly expanded definition of advertising and the seven general prohibitions that apply to all ads. In this post, we describe key ways technology can be leveraged to implement the new rule. Upcoming posts in this series will examine testimonials and endorsements, presentation of performance results, third-party ratings, record-keeping and Form ADV requirements, review and approval of advertisements, and overall best practices.

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Reality Check: Introducing the New SEC Marketing Rule

May 4, 2021 7:30:00 AM / by Karen Mauk posted in SEC, SEC Rule, SEC Updates, Compliance

The new SEC marketing rule calls to mind the Peter Parker principle: "With great power comes great responsibility." (Any Spider-Man fans out there?) The marketing rule consolidates two outdated rules and accounts for updated technology, like social media. It was a long time coming, providing a much-needed update to advertising regulations in place since 1961 and cash solicitation rules in place since 1979Now, advisers can choose whether to implement the rule on or after the effective date of May 4, 2021, or wait until the compliance date of November 4, 2022. But here's the catch: advisers who act now must comply with the rule in its entirety; that is, no cherry-picking some rule requirements and ignoring others. It’s a big decision, and advisers aren’t taking it lightly.

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SEC Issues Proposal to Modernize the Advertising Rules

Feb 27, 2020 1:00:00 PM / by Joot posted in SEC, SEC Rule, Advertising

1961, Was it really a "good year?" Some of us couldn’t say for sure since we weren’t even born yet!  For those of us that were, gas was about 27 cents/gallon.  John F. Kennedy was President and about to deal with the "Bay of Pigs" debacle which would tarnish his first year in office.  East German authorities closed the border between East and West Berlin and construction of the Berlin wall would commence.  Pampers were introduced as the world’s first disposable diaper.  Oh, and the Securities and Exchange Commission published the first rule on advertising!

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Q&A: Client Relationship Summary (Form CRS)

Sep 5, 2019 11:45:00 AM / by Bo J. Howell posted in SEC Examinations, SEC Rule

Last week, Joot published an article on Regulation Best Interest and Form CRS (Customer or Client Relationship Summary). We heard from many of our readers about the article and we’re glad it was helpful. Some of you had great questions about the application of Form CRS and the definition of a “retail investor”. Below are our responses to your questions. Keep ‘em coming!

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SEC: Regulation Best Interest

Aug 29, 2019 11:15:00 AM / by Bo J. Howell posted in SEC Rule, SEC Updates, Brokers

As many of you know, on June 5, 2019, the SEC passed Regulation Best Interest (Regulation BI) and related rules and interpretations that were intended to enhance investor protection and clarify the difference between broker-dealers (BDs) and registered investment advisers (RIAs). The rule and two final interpretations were over 1,300 pages long, ugh. When I think about reading that many pages of bureaucracy inspired legalese, I think of my former colleague Rich Rudman saying that when it comes to legal writing (actually, I think he applied it to almost everything): Be Bold, Be Brief, Be God. With that in mind, we’re going to summarize the whole thing in one article that is less than 2,000 words. Here we go! 

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An Analysis of the SEC's Proposed Fund of Funds Rule

Apr 19, 2019 11:00:00 AM / by John Yoder posted in SEC Rule, ETFs, Guest Author

SEC’s Proposed Fund of Funds Rule Simplifies Fund of Funds Compliance, But Creates Liquidity Concerns

By John Yoder and Bo Howell

For over a decade now exchange-traded Funds (“ETFs”) have become a primary investment for asset managers to gain low-cost access to broad segments of the markets. More recently, ETFs have grown to focus on more niche parts of the investment universe (e.g., sector ETFs, thematic ETFs, etc.). The growth in the number and size of these products reflects an asset management trend away from concentrated portfolios to asset allocation strategies. Often, these strategies are packaged in mutual funds or other investment companies that simply acquire shares of ETFs and other funds, as opposed to individual securities like stocks or bonds.

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IM Director's Recent Remarks on Standards of Conduct & Liquidity Risk Management

May 25, 2018 8:30:21 AM / by Bo J. Howell posted in Investment Advisers, Liquidity, SEC, SEC Rule, SEC Updates, Uncategorized, 1934 Act, Advisers Act, Brokers, Compliance, Directors/Trustees, Disclosure

IM Director's Recent Remarks on Standards of Conduct & Liquidity Risk Management

by Peter Michael Allen

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8 Things You Need to Know about the Liquidity Rule

May 11, 2018 4:30:33 AM / by Bo J. Howell posted in Liquidity, Regulatory Events, Rule 22e-1, SEC, SEC Rule, SEC Updates, Service Providers, 1940 Act, Compliance, Directors/Trustees

1. Its name.

Most people simply refer to the rule as the “liquidity rule”, but its technical name is Rule 22e-4: Investment Company Liquidity Risk Management Programs. If the rule survives in any meaningful form, we should start a contest on whether the industry keeps calling it the liquidity rule or refers to it as Rule 22e-4. Think of Rule 38a-1 under the Investment Company Act. Some people may refer to it as the “compliance rule”, but most simply call it Rule 38a-1.

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