Recognized as one of the premier practices in the industry, the Investment Funds Group leverages its extensive market knowledge and deep, long-term relationships to help sophisticated clients reach their most important investment goals. We have been at the forefront of some of the industry’s most creative and innovative investment product developments, helping clients set market trends instead of reacting to them.
SEC Adopts Rule Regarding Political Contributions by Investment Advisers
July 8, 2010
On June 30, 2010, the SEC adopted a new Rule 206(4)-5 under the Investment Advisers Act to curb "pay to play" practices by certain investment advisers. The Rule prohibits an investment adviser from: (i) providing advisory services for compensation to a government entity for two years after the adviser, or certain of its executives or employees, makes a contribution to certain elected officials or candidates who are in a position to influence the selection of the adviser; (ii) providing or agreeing to provide, directly or indirectly, payment to any third party (i.e., a placement agent) for a solicitation of advisory business from any government entity on behalf of such adviser, unless the third party is an SEC-registered investment adviser or an SEC-registered broker-dealer, in each case, subject to similar pay to play restrictions; and (iii) coordinating or soliciting from others campaign contributions to certain elected officials who are in a position to influence the selection of the adviser or payments to certain political parties in the state or locality where the adviser is seeking government business.