Pay-to-Play: SEC Extends Compliance Deadline for Provisions of Advisers Act Rule 206(4)-5 Limiting Payments to Third-Parties

June 14, 2012

The U.S. Securities and Exchange Commission (SEC) on June 8, 2012 extended for an undefined period the compliance deadline for portions of rule 206(4)-5 (Rule) under the Investment Advisers Act of 1940 (Advisers Act) that would limit an adviser’s ability to pay compensation, directly or indirectly, to third parties (including, for this purpose, affiliated companies of the adviser and their employees) for soliciting business from public retirement systems and other state and local government entities. The limitations, once in place, will prohibit an adviser from paying compensation to finders, solicitors, or placement agents that are not registered with the SEC as either investment advisers, broker-dealers or municipal advisors.

Read “Pay-to-Play: SEC Extends Compliance Deadline for Provisions of Advisers Act Rule 206(4)-5 Limiting Payments to Third-Parties.”