SEANGWORLD FACT BRIEF · SEANGWORLDNEWS · 1 SOURCE
SEC proposes rescinding pay-to-play political contribution rule for investment advisers
The U.S. Securities and Exchange Commission (SEC) announced a proposal to repeal its "pay-to-play" rule, which currently prohibits investment advisers from providing compensated advisory services to government clients for two years after making certain political contributions. The SEC determined that since the rule's 2010 adoption, it has caused significant unintended consequences and operational challenges, including harsh penalties for small political donations and suppression of political speech. The proposal would eliminate Advisers Act Rule 206(4)-5 and related recordkeeping requirements, while other Advisers Act provisions remain enforced. The public comment period for the proposal will be open for 60 days after its Federal Register publication.
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Facts
- Established fact
The SEC issued a proposal to rescind its "pay-to-play" rule prohibiting investment advisers from providing compensated services to government clients for two years after political contributions to certain officials or candidates.
- Established fact
The SEC decided the rule led to significant unintended consequences and operational challenges since its adoption in 2010.
- Established fact
As part of the proposal, Advisers Act Rule 206(4)-5 and corresponding recordkeeping provisions would be rescinded.
- Established fact
Other Advisers Act rules, including fraud prohibitions and fiduciary duties, will continue to apply after the proposed rescission.
- Established factSEC Chairman Paul S. Atkins
The SEC Chairman Paul S. Atkins stated the rule is overly prescriptive, produces unintended consequences, penalizes small donations, and suppresses political speech.
- Established fact
The public comment period on the proposal will remain open for 60 days after the Federal Register publication.
What changed
The SEC proposes to rescind the "pay-to-play" political contribution rule (Advisers Act Rule 206(4)-5) and related recordkeeping provisions for investment advisers.
Who is affected
Investment advisers providing compensated investment advisory services to government clients.
What happens next
Public comments will be accepted for 60 days following the proposal's publication in the Federal Register before any final action is taken.
Sources
1 SOURCE