SEC’s Division of Investment Management Issues Guidance Update on Testimonial Rule and Social Media

March 31, 2014

The SEC’s Division of Investment Management issued guidance, including a list of Q&As, on the testimonial rule and social media in its March 2014 IM Guidance Update. The Guidance Update focuses on an investment adviser’s use of social media and its publication of advertisements that feature public commentary about the adviser that appears on independent, third-party social media sites. It is designed to assist advisers in applying Section 206(4) of the Advisers Act and Rule 206(4)-1(a)(1) thereunder to their use of social media.


The staff stated that in certain circumstances an adviser’s or investment adviser representative’s (IAR’s) publication of all of the testimonials about the adviser or IAR from an independent social media site on the investment adviser’s or IAR’s own social media site or website would not implicate the concern underlying the testimonial rule. The guidance also addresses the following areas:

  • Third-party commentary;
  • Reference by an adviser to independent social media site commentary about the adviser in a non-social media advertisement;
  • Client lists on social media sites;
  • Fan/community pages; and
  • Existence of an adviser’s advertisement within the architecture of an independent web site that contains independent public commentary about the adviser.

Click here to access the IM Guidance Update.


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