Eric Brown at Political Activity Law reports on big pay to play news from the Securities and Exchange Commission.
According to a press release from the SEC – “The Securities and Exchange Commission today voted unanimously to approve new rules to significantly curtail the corrupting influence of “pay to play” practices by investment advisers.”
The decision is in three main parts:
- It prohibits an investment adviser from providing advisory services for compensation — either directly or through a pooled investment vehicle — for two years, if the adviser or certain of its executives or employees make a political contribution to an elected official who is in a position to influence the selection of the adviser.
- It prohibits an advisory firm and certain executives and employees from soliciting or coordinating campaign contributions from others — a practice referred to as “bundling” — for an elected official who is in a position to influence the selection of the adviser. It also prohibits solicitation and coordination of payments to political parties in the state or locality where the adviser is seeking business.
- It prohibits an adviser from paying a third party, such as a solicitor or placement agent, to solicit a government client on behalf of the investment adviser, unless that third party is an SEC-registered investment adviser or broker-dealer subject to similar pay to play restrictions.
Watch SEC Chairman Mary L. Schapiro’s discussion of the new prohibition here.
The rules come into effect 60 days after their publication in the Federal Register.
Tags: financial reform, Pay to Play, SEC, Securities and Exchange Commission
