How Private Equity can benefit from the SEC’s Marketing Rule

October 20, 2022
sec marketing rule

When you Google “SEC Marketing Rule” you’re going to find a lot of summaries, but very few distilled recommendations that are useful. While we’re not a compliance agency, we’ve dealt with and accommodated regulations repeatedly. With the SEC, we certainly put that at the top of our regulatory body list, treating it with utmost care.

That said, we’re not interested in summarizing, we want to offer suggestions as to how we’d approach this, and ultimately how your firm can take advantage of this equalizing moment. Each PE firm we deal with has its own process for communicating with current investors, prospective investors and the public. What we’d like to offer is a potentially more structured methodology that assures you’re balancing demand, awareness and compliance perfectly.


Distilling down the SEC Marketing Rule:

Who: Primarily prospective investors/clients, along with existing investors/clients. While aspects apply to the general public, you need to be mostly concerned with how you communicate with investors.

What: Content regarding securities. This is for all practical purposes 90% of the Marketing Rule, and breaking down what is acceptable. Most if not all of this revolves around the comprehensive representation of portfolio performance and the use of endorsements. While these are critical touchpoints to communicate, they are also quite narrow.

Where: All channels. Although in-person, oral, and extemporaneous presentations and conversation are essentially excluded. This means there’s nothing in here specifying where you can or can’t promote your firm.

When: Nothing, which means you can distribute content at whatever cadence you need.

Why: The other big topic in here surrounds Principles. It is really a step back from the ‘what’- making sure that your firm is aligned with the SEC’s ‘common sense’ perspective on marketing. The fact that the principles are referred to frequently means it is very difficult for the SEC, GPs, BDs, Agencies, etc to corral all of this digital information. It will boil down primarily to whether or not your fim holds the SEC Principles in high regard.

How: A portion of the regs relates to Process. Actually, it doesn’t provide that process, instead it more or less requires that you have one, and that the process can in fact be audited if challenged. This is one are where Mavenray helps by reinforcing disciplined process, systems and tech to assure you have the oversight and accountability necessary.


Three tips on incorporating SEC marketing compliance without sacrificing momentum.

So let’s talk through the priorities here and how someone like Mavenray would work with you to not only improve compliance, but more importantly separate yourself from the competition while doing it. Note that since its an even playing field here, differentiation and positioning are starting from the same point.



This is really all that matters. Don’t get overwhelmed by the verbosity of this Rule. If you can get a system in place that assures the content you’re distributing complies – and your intentions are ethical – then you’re really ahead of the game as far as the SEC is concerned. Here’s how we’d approach this:

  • The content should START with an eye for generating awareness instead of compliance. If you create your campaigns and communications rooted in a regulatory fog then you’re not giving yourself the opportunity to actually market yourself. You’re just disseminating information. Allow marketers and brand experts to research what will generate demand and awareness, what will position you prominently in the market. Then, layer on compliance in a few stages after the fact. You’re more likely to see momentum build this way.
  • Have your marketing, brand, content agencies and resources fully document everything. From the discovery to strategy design and creation of content, the review and approval steps should be as simple to audit as possible. This also assures you have the control to match the accountability.
  • Things will no doubt make it through that are not 100% compliant. First, there’s human error – mistakes happen. More importantly, we’re dealing with an openly chaotic landscape with Social and Digital communities. It’s frankly impossible to fully contain. There is too much that’s out of your control. If a Broker Dealer reposts your ad, then adds commentary that you did not review or approve, this is not a compliance issue. If we’re being honest with ourselves, this is where much of the stress around compliance comes from. As long as you have the Process and the Principles covered, you’ll be ok.

The second most important takeaway. Make sure you have the checkpoints, policy and procedures in place to review and approve content. This is not complicated at all, and once you get in a routine you’ve overcome a massive hurdle. Here’s one approach to process that Mavenray would recommend:

  • Work in quarters. Timebox your external communications so that you have large enough windows to learn from your campaigns, but small enough to version-control your policies and procedures over the course of the year.
  • Establish a content plan and schedule. This is an auditable asset, something you need at a minimum. This wont articulate reviews and approvals, but will offer a sort of scaffolding moving forward. This will operate with a quarterly cadence.
  • Establish goals for the year Key metrics and KPIs that the whole team and each of these content plans and schedules should be aiming for.
  • Define your Standards and Guidelines. Compliance is a standard and should have guidelines accordingly. By incorporating regulatory standards and guidelines here, you’re helping to formalize Process while emphasizing Principle. Training and education is also encouraged along with Standards and Guidelines. The Marketing Rule in fact points this out as one of its few recommendations to bolster your approach to Process and Principles.
  • Conduct random internal audits. Since reviewing every piece of content could become problematic (although optimal) the random audits will help to keep in check and prove that a process is in place. It may make sense to use a third party for this.
  • Over-document. Many marketing resources are rooted in creativity. The creative process doesn’t fit in a spreadsheet very well. However, those of us that allow Data to lead the Brand and the Creative process have an easier time with this. Mavenray not only employs this approach natively, but we’ll actually help elevate your discipline as well.

The final pillar. There’s not much to say here; the SEC Marketing Rule essentially tells us that if you have an established process, and that process results in fully compliant content, then you have Principle.

  • However, as noted above, take the time to incorporate your firm’s principles regarding marketing and communications – aside from the SEC regs. Use training and education to help elevate and refine your team. These simple tactics will help set the right stage.

While a 500 page regulatory document from the SEC is nothing to be dismissive about, once it’s broken down to its basic elements, it provides a unique opportunity to differentiate from other PE firms. We’d love to help.

Contact Mavenray about your firms marketing needs while helping to assure you remain compliant.

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