SEC Proposes Rescission of Political Contribution Rule for Investment Advisers

Facts

• The political contribution rule has led to significant unintended consequences since its adoption in 2010. ^[1]
• The Securities and Exchange Commission today issued a proposal to rescind its 'pay-to-play' rule. ^[1]
• Advisers have indicated that the rule is operationally challenging to implement. ^[1]
• SEC Chairman Paul S. Atkins stated that the political contribution matters are more properly governed by local ordinances, state laws, and federal election regulations—not by the SEC. ^[1]
• The 'pay-to-play' rule prohibits investment advisers from providing compensated investment advisory services to a government client for two years after making a political contribution to certain elected officials or candidates. ^[1]

Sources (1)