On June 30, 2010, the Securities and Exchange Commission (SEC) adopted Rule 206(4)-5 (the Rule) under the Investment Advisers Act of 1940 (the Advisers Act). The Rule is aimed at curtailing “pay-to-play” activity, i.e., preventing advisers from making political contributions or other payments to influence their selection by government officials to provide advisory services for public programs such as public pension plans and 529 Plans. The Rule applies to investment advisers registered with the SEC, as well as those exempt from registration pursuant to Section 203(b)(3) of the Advisers Act.

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Source: Investment Management Alert
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