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Securities Compliance Podcast: Compliance in Context

Podcast Season 3 Episode 8

In the third episode of the master class series on the SEC Marketing Rule, you’ll hear from host Patrick D. Hayes along with our industry panelists Genna Garver, Partner with Troutman Pepper, Bree Ward Associate with Akerman LLP, and Matt Shepherd, Director with the ACA Group. Together, they'll discuss the general impact of the new Marketing rule to Private Funds. They will dive into the requirement to present net performance, the application of related performance to private funds, and considerations around hypothetical performance. They'll also take a look at other relevant marketing rules and prohibitions that still apply.

Season 3, Episode 8 Topics:

Interview with Genna Garver, Bree Ward, Matt Shepherd

  • 1:50: Introductions

  • 4:12: Impact of the new rule to Private Funds

  • 15:08: Performance

  • 19:15: Extracted Performance

  • 32:18: Related Performance

  • 43:35: Hypothetical Performance

  • 55:10: Endorsements: Replacement of Cash Solicitation Rule, Disclosures, Cap Intro Programs, and Testimonials

  • 1:13:10: New private fund rule proposals


07:26 –“The big take-away here is that the marketing rule is a merger of the prior cash solicitation rule and the advertising rule... Out of the gate, the combined rule, on its face because of the two-pronged definition to the term advertisement bring in pooled investment vehicle private fund, in particular investors, for compliance generally for both rules and that’s a fundamental shift for how the prior rules both operated.” – Genna

14:11 – “As a practitioner, either on the legal side or the compliance side, you have to presume that written materials or recordings are going to be deemed advertisements. – Genna

18:00 – “Historically, some information has only been presented gross because it’s either mathematically difficult or impossible to come up with a net version of that number. Or is it meaningful to present a net version of that number... The problem is that the rule creates this new definition called extracted performance… The rule explicitly says, if you show extracted performance it must be shown net and that’s a problem. “ - Matt

1:14:37 – “Get your policies and procedures drafted in a way that really tries to catch the ethos of this rule. Which is: Is it fair and balanced? Are you making disclosures? And try to capture your processes in a way that makes sense, that you can justify them, and then follow them.” – Bree

About the Securities Compliance Podcast: Compliance in Context

Introducing the Securities Compliance Podcast: Compliance in Context presented by Calfee, Halter & Griswold and the National Society of Compliance Professionals and hosted by Patrick D. Hayes, Partner and leader of Calfee's Investment Management practice.

Designed as a personal master class for the securities legal and compliance professional, this podcast embodies Patrick’s passion to help you put Compliance In Context™ by combining the technical expertise of industry thought leaders and innovators with the practical experience of doers and key decision makers.

Listeners will find the podcast on Apple Podcast, Google Podcast, Spotify and Stitcher.

The opinions expressed by guest speakers and panelists during Securities Compliance Podcasts may not necessarily reflect the viewpoints of the attorneys and professionals of Calfee, Halter & Griswold LLP or its subsidiaries or affiliates. Calfee’s educational content is intended to inform and educate readers about legal developments and is not intended as legal advice for any specific individual or specific situation. Please consult with your attorney regarding any legal questions you may have. With regard to all content including case studies or descriptions, past outcomes do not predict future results.

Media Contact

Susan M. Kurz
Chief Marketing & Client Development Officer
216.622.8346 (office)
513.502.8950 (mobile)

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