The SEC has proposed amendments (Proposed Rule) to Rule 206(4)‑1 under the Investment Advisers Act of 1940, known as the “Advertising Rule” (Current Rule), that, if adopted, would provide much-needed updates to reflect changes in technology, the expectations of investors seeking advisory services and the evolution of industry practices. The Proposed Rule establishes a principles-based approach to regulating advertisements, eschewing a prescriptive regulatory framework. In addition to permitting the use of certain testimonials, endorsements and past investment advice in advertisements, the Proposed Rule would, under certain circumstances, permit the use of performance results prohibited by the Current Rule. In a guest article, Genna Garver and Kurt Wolfe, partner and associate, respectively, at Troutman Sanders, review the current regulatory framework for performance advertising; summarize the key changes in the Proposed Rule; and discuss the potential effect of the Proposed Rule, if enacted in its current form, on private fund managers. For more on the need for updates to the Current Rule, see our two-part series “Is the Advertising Rule Obsolete?”: Part One (Aug. 29, 2019); and Part Two (Sep. 5, 2019). For additional commentary from Garver, see “Connecticut Welcomes You! Federal Financial Regulatory Reform Restores Connecticut’s Authority Over Hedge Fund Advisers” (Jul. 30, 2010); and “Implications of the Volcker Rule – Managing Hedge Fund Affiliates With Banks” (Mar. 11, 2010).