The fall agenda from the Securities and Exchange Commission indicates that there could be changes to its advertising rule, InvestmentNews writes. This would provide a much-needed update and ease the pressures of social media-related compliance, according to the publication.
Advertisement Update Could Ease Social Media Worries
The current regulation has been on the books since the 1960s and has failed to keep pace with technology, according to compliance experts and adviser advocates, InvestmentNews writes.
Advisors are unsure of what they can and can’t to do on social media, Todd Cipperman, principal at Cipperman Compliance Services, tells the publication. The current interpretation of the SEC’s ban on testimonials means advisors can’t be endorsed on LinkedIn and fear the consequences of likes on Facebook, the publication writes. As such, social media should be one of the major focuses of the update, according to Karen Barr, president and CEO of the Investment Adviser Association, InvestmentNews writes. Barr says she wants the SEC rules to be more principles-based and less rigid so advisors can modernize, according to the publication.
The SEC has provided guidance with no-action letters and risk alerts for several years, and this update will allow for clarification on several issues, the publication writes. For starters, the SEC should update what it defines as an advertisement, Barr tells InvestmentNews. The SEC should also make clear which forms of advertisement it doesn’t like, according to Cipperman, InvestmentNews writes.
The intention to update was a long-term item in last year’s fall agenda and is now in the proposed rule stage, and, according to Barr, could be seen as early as April 2019, InvestmentNews writes.
