Since the so-called advertising and cash solicitation rules were adopted in 1961 and 1979, respectively, the world and the private funds space have changed dramatically. For example, in April 2018, Paul Cellupica, Deputy Director of the SEC’s Division of Investment Management, observed that the advertising and solicitation rules were adopted when social media, among other things, did not exist. Given the desperate need to modernize the advertising and cash solicitation rules, the Commission issued proposed changes to those rules in November 2019. On December 22, 2020, the Commission issued a new marketing rule (Marketing Rule), which amends the existing advertising rule and replaces the cash solicitation rule. This two-part series examines the Marketing Rule through the eyes of private fund managers. This first article examines important changes made to the originally proposed amendments and provides key takeaways for private fund managers. The second article
will spell out the next steps for managers’ legal and compliance departments. See “The New Marketing Rule: Key Elements and Commissioner Concerns
” (Mar. 4, 2021).