SEC Staff Reverses Some “Gross/Net” Marketing Rule Guidance

On Wednesday evening, the SEC Staff published two new FAQs relating to the presentation of gross and net performance under the Investment Advisers Act Marketing Rule, the sweeping 2022 overhaul of the advertising and endorsement restrictions applicable to registered investment advisers (“RIAs”). 

Both FAQs provide significant relief from prior Staff interpretations of the Marketing Rule and will dramatically reduce compliance burdens for RIAs in the areas of performance of individual investments and certain performance “characteristics” of portfolios and investments. The limited open questions raised by new FAQs pale in comparison to the issues RIAs faced with the prior interpretations.

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