Tuesday, August 4, 2009

SEC Publishes "Pay to Play" Rule Proposals

As we mentioned in our July 21, 2009 post, "Pay to Play" Rule Proposals on SEC Agenda, at its July 22 open meeting, the Commission proposed rules designed to address "pay to play" practices in the investment adviser industry. These rule proposals would:
  1. prohibit an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees make a contribution to certain elected officials or candidates;

  2. prohibit an adviser from providing or agreeing to provide, directly or indirectly, payment to any third party for a solicitation of advisory business from any government entity on behalf of such adviser;

  3. prevent an adviser from soliciting from others, or coordinating, contributions to certain elected officials or candidates or payments to political parties where the adviser is providing or seeking government business; and

  4. require a registered adviser to maintain certain records of the political contributions made by the adviser or certain of its executives or employees.
The full text of these rule proposals is now available on the SEC's website at: http://www.sec.gov/rules/proposed/2009/ia-2910.pdf

Comments on the proposal, "Political Contributions by Certain Investment Advisers," are due by October 6, 2009. Comments submitted may be found at: http://sec.gov/comments/s7-18-09/s71809.shtml