Marketing Rule Risk Alert: Practical Takeaways for Compliance Teams
The SEC’s Marketing Rule continues to be an area of heightened regulatory attention—and recent exam findings suggest that many firms are still struggling with execution, not intent.
In January’s NSCP Currents Live webinar, The SEC Marketing Rule Risk Alert: Are You Ready?, Issa Hanna, Partner at Eversheds Sutherland, and Melissa Starr, Chief Compliance Officer at Corundum Group, walked through the SEC’s Marketing Rule risk alert with a practical lens, focusing on where firms are getting tripped up during exams and what compliance teams should reassess now.
Key Highlights
Disclosure Timing and Placement Matter
A recurring theme throughout the discussion was the importance of disclosing required information at the time of dissemination. This is particularly critical for testimonials, endorsements, and third-party ratings, where firms may rely on links or separate disclosures that are not sufficiently prominent or contemporaneous.
Marketing Oversight Extends Beyond Centralized Channels
The speakers emphasized that decentralized marketing does not reduce compliance obligations. Websites operated under DBAs, social media accounts, and referral or review platforms all fall within the scope of the Marketing Rule. Firms should ensure these “side channels” are captured in review workflows and supervisory testing.
Third-Party Ratings Require a Reasonable Basis
Firms using third-party ratings should be prepared to demonstrate a reasonable basis for believing the rating process was fair and balanced. This includes understanding how participants were selected and whether they had an equal opportunity to provide favorable and unfavorable feedback.
Details Can Create Risk Quickly
Small presentation choices—such as font size, placement of disclosures, or reliance on hyperlinks—can have outsized regulatory consequences. Review sites like Google, in particular, can raise adoption and entanglement concerns if firms are not actively monitoring how ratings and comments are displayed.
Final Takeaway
TMarketing Rule compliance often breaks down at the margins. Firms have policies in place, but inconsistent execution, overlooked platforms, or seemingly minor presentation choices can create meaningful risk. This webinar serves as a practical reminder that ongoing testing, clear standards, and cross-functional coordination are essential to staying ahead of exam security.
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