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- Publisher
- Emerald Publishing
- Copyright
- © 2017 Seward & Kissel LLP.
- ISSN
- 1528-5812
- DOI
- 10.1108/joic-04-2017-0026
- Publisher site
- See Article on Publisher Site
Abstract
To explain and analyze the SEC’s January 17, 2017 announcement of settlements with ten investment advisory firms related to charges that those firms violated Rule 206(4)-5, known as the “Pay-to-Play Rule,” of the Investment Advisers Act of 1940.Design/methodology/approachExplains the Pay-to-Play Rule, its applicability to investment advisers, the de minimis and returned contribution exceptions, and the Rule violations cited by the SEC, and draws conclusions for the benefit of registered investment advisers and exempt reporting advisers.FindingsThe settlement included censures, civil money penalties, and recovery of compensation earned for firms’ failure to abide by the Rule, most often involving relatively small contributions by single covered individuals.Practical implicationsIn light of these settlements, registered investment advisers and exempt reporting advisers may wish to review the adequacy of their policies and procedures with respect to the Pay-to-Play Rule and the effectiveness of their implementation.Originality/valuePractical analysis and guidance from an experienced lawyer with a specialty in investment management.
Journal
Journal of Investment Compliance – Emerald Publishing
Published: Jul 3, 2017
Keywords: Investment advisers; Investment Company Act of 1940; US Securities and Exchange Commission (SEC); Pay-to-Play Rule