The U.S. Securities and Exchange Commission (SEC) has updated its guidance on marketing rules, impacting how market participants can advertise performance data. Subject to specific conditions, the SEC now permits the advertisement of gross performance numbers for individual investments, also known as extracted performance, without mandating the simultaneous display of net performance figures. This marks a departure from previous requirements, offering more flexibility in presenting performance metrics.
This regulatory adjustment could have significant implications for financial firms and advisors in tailoring their marketing strategies. By allowing advertisers to focus solely on gross performance, the rule change might facilitate clearer communication of investment success, albeit within the boundaries set by the SEC’s conditions. For more detailed information on these developments, the original report from the National Law Journal offers further insights.