The U.S. Court of Appeals for the Second Circuit upheld a New York City “pay-to-play” law against various constitutional challenges: Ognibene v. Parkes. The Pay to play law is in Local Law 34 and it: Lowers the caps applicable to campaign contributions from parties that have “business dealings” with New York City to $400 (otherwise [...]
Tag Archives: pay-to-play
Presidential Campaign Season and the SEC’s Pay-to-Play Rule
With the recent Iowa Straw Poll, the presidential campaign season is getting into full gear. That also means that campaign fundraising is in full gear. I thought it would be useful to apply the SEC’s new Pay-to-play for Investment Advisors to the crop of presidential contenders. Under SEC Rule 206(4)-5, investment advisors are limited in [...]
SEC Answers Questions About the Pay to Play Rule
The staff of the Division of Investment Management at the Securities and Exchange Commission has prepared responses to some questions about Rule 206(4)-5 under the Investment Advisers Act of 1940. Here are a few that caught my eye: Question II.6. Covered Associates’ Family Members. Q: Are contributions by an advisory employee’s family members covered under [...]
SEC’s Pay-to-Play Rule Is Effective Today
If you have (or want to have) government investors in your private fund then you need to be in compliance with Rule 206(4)-5 starting today. Summary (from the SEC): The Securities and Exchange Commission is adopting a new rule under the Investment Advisers Act of 1940 that prohibits an investment adviser from providing advisory services [...]
Pay to Play Rules for Placement Agents
The SEC imposed strict limitations on the ability of investment advisers to make political contributions when their clients include government bodies when it issued Rule 206(4)-5. They don’t want government investment decisions decided campaign contributions. This limitation also applies to private investment funds under the language of the rule and the changes to the Investment [...]
California’s New Placement Agent Law
California has become the latest state to regulate the use of placement agents who help investment managers secure government pension fund money. (Or is that placement agents who help government pension fund money find suitable investment managers?) California Assembly Bill 1743 was backed by the California Public Employees’ Retirement System, the state treasurer and the [...]
A Closer Look at the new SEC Rule 206(4)-5 on Pay to Play
Over the weekend, the Securities and Exchange Commission released the full text of Rule 206(4)-5 in Release No. IA-3043. I made few notes during the broadcast of the open meeting, but there were lots of unanswered questions. Rule 206(4)-5 is only 12 pages long, but Release IA-3043 also includes another 190 pages of commentary and [...]
SEC Votes on Pay to Play
At Wednesday’s Open Meeting the Securities and Exchange Commission took up the discussion of their proposed rules on pay-to-play for investment advisers. The proposal is a new Rule 206 (4)-5 under the Investment Advisers Act. The Commission voted unanimously to adopt the rule. The rule will have three main prongs: Two Year Time-Out An investment [...]
SEC’s Rule on Pay to Play is Coming
It’s been almost a year, but it looks like the SEC is ready to issue its rule on political contributions by investment advisers. They announced the subject matter for the Wednesday June 30 10:00 am open meeting: The Commission will consider whether to adopt a new rule and related rule amendments under the Investment Advisers [...]
FINRA and Placement Agents
Will FINRA step in to prevent a ban on placement agents working with government investors? You may remember that last August, the SEC published a proposed rule that would create a prohibition on paying a third party, such as a placement agent, to solicit a government client on behalf of the investment adviser: IA-2910. The [...]
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