SEC Marketing Rule Review Checklist Template

Marketing Communication Review Checklist: [Communication title]

Pre-use review record for advertisements and marketing communications of an investment adviser or asset manager. The US core follows the SEC Marketing Rule, Rule 206(4)-1 under the Investment Advisers Act of 1940 (adopted 2020, compliance date 2022-11-04), with the related books and records in Rule 204-2(a)(7), (11), (15) and (16), the policies required by Rule 206(4)-7 and the SEC staff Marketing Compliance FAQs (latest postings 2026-01-15, checked 2026-10-25). Optional sections cover EU fund and MiFID marketing communications (Directive 2014/65/EU Article 24(3), Commission Delegated Regulation (EU) 2017/565 Article 44, Regulation (EU) 2019/1156 Article 4 and ESMA guidelines ESMA34-45-1272) and UK and broker-dealer rules by reference only. The example firm, Kestrel Bay Capital, is fictional. Replace every [bracketed] value and every row marked Example. Obtain the rules and guidance for the normative text. This is a document format, not legal, compliance or investment advice.

Document control

Approvals

Revision history

Contents

• 1. Scope and classification · 2. General prohibitions · 3. Performance presentation · 4. Testimonials and endorsements · 5. Third-party ratings · 6. Specific investment advice and portfolio characteristics
• 7. Sustainability and ESG claims · 8. EU and UK marketing communications · 9. Channels, distribution and third-party content · 10. Books and records
• 11. Findings, decision and conditions · 12. Worked example · 13. Traceability matrix · Glossary and references · Standard and licence note

1. Scope and classification

1.1 Classifying borderline pieces

Most disputes about scope come from a handful of recurring formats. Work through them in the same order every time and write the reasoning in MKT-SCP-001, because the classification decides which records must be kept and an examiner will test it.

• One-to-one emails. A message written for one prospect is not an advertisement unless it contains hypothetical performance. A standard text sent to several prospects is a communication to more than one person even if each copy carries a different name, so treat mail merges, sequences in a customer relationship management system and reused "personal" notes as advertisements.
• Replies to unsolicited requests. Answering a specific question that a prospect or consultant asked is generally outside the definition, but anything added that the person did not ask for, such as a full pitch book attached to a reply about fees, is reviewed as an advertisement.
• Market commentary and thought leadership. A newsletter on interest rates that does not offer the firm's services is usually not an advertisement. It becomes one when it shows strategy performance, names products the reader can invest in, or ends with an invitation to discuss a mandate.
• Communications to existing clients. Reports on an existing account are not advertisements; offering an existing client a new strategy or a new private fund is.
• Consultant databases and requests for proposal. Entries the firm supplies to a consultant database for many users are advertisements; a response to a request for proposal from a single prospect is usually not, unless it includes hypothetical performance.
• Live events. Extemporaneous remarks are excluded, but slides, scripts, prepared remarks and the recording if it is later posted are not.

When unsure, review the piece as an advertisement. The cost of an unnecessary review is small; the cost of an unreviewed advertisement is a rule breach and a missing record.

2. General prohibitions

Additional firm checks: plain language for the intended audience; product and strategy names match legal documents; AUM and headcount figures match Form ADV and are dated; logos of clients are used only with written permission and without implying endorsement.

How to substantiate. Before marking MKT-GEN-002, list every statement of fact in the piece (numbers, rankings, "first", "leading", "award-winning", team sizes, years of experience, client counts) and attach the source for each to the review record: a system report with its run date, a third party's published ranking with its date and methodology, or a signed statement from the owner of the fact. Opinions are not exempt when they imply facts: "our disciplined process protects capital in falling markets" implies a downside record that must be shown fairly. Firm assets quoted in marketing should match the latest Form ADV figure (for Kestrel Bay Capital, USD 2,480 million as of 2025-12-31) or carry their own date and basis.

3. Performance presentation

3.1 Performance inventory

List every performance figure, chart and statistic in the piece before reviewing it.

3.2 Performance checks

3.3 Recomputation of annualised returns

Recompute annualised figures from the annual or monthly returns held in the performance system. For $n$ annual returns $r_1, \dots, r_n$:

Cumulative return is the product term minus one. Never annualise periods shorter than one year.

3.4 Choosing the fee for net returns and testing it

Net performance must reflect the deduction of all fees and expenses the client or investor paid, or would have paid, for the adviser's services. Rule 206(4)-1(e)(10) lets the firm use a model fee instead of actual fees only where the model fee equals the highest fee charged to the intended audience, or where it produces net returns no higher than actual fees would have produced. Read the 2026-01-15 staff FAQ on model fees before choosing, and record the choice in MKT-PRF-002.

Work in four steps. First, define the intended audience precisely (for example, US institutional separate accounts of USD 5 million or more). Second, take the highest fee that audience could pay on the current schedule, here 0.75% from the brochure fee schedule, and include any performance fee or fixed charges that would apply. Third, check that the fee is deducted at the same frequency as the return series (monthly returns need one twelfth of the annual fee, compounded), and that the gross series is after transaction costs. Fourth, compare the model net series with the actual net series of the composite for the same period; if the model net is higher in any period shown, the model fee fails the second test and the firm must rely on the highest-fee test or use actual fees.

Common errors: using the average fee of the composite for a prospect who would pay the top rate; deducting the fee once a year from an annual figure, which understates the drag; ignoring the fund expenses of a pooled vehicle; and showing net returns of a private fund before carried interest. Keep the calculation file with the review record, as Rule 204-2(a)(16) requires the documents needed to demonstrate every performance figure.

4. Testimonials and endorsements

How to evidence a reasonable basis. Rule 206(4)-1(b)(2)(i) does not prescribe a method, so the record must show what the firm did. For a compensated promoter, keep the written agreement with the approved script and disclosures attached, the promoter's annual certification that it used only approved material, and the results of periodic checks, such as a sample of the promoter's emails or a review of its website each quarter. For a testimonial taken from a client, keep the client's written consent, the date the statement was given, confirmation that the client is still a client when the piece is used, and the compensation (cash or non-cash) recorded against it. For reviews on third-party sites that the firm shares, record which reviews were shown and the rule used to select them, so that a reviewer can confirm that negative reviews were not removed.

The disqualification check in MKT-TST-006 is repeated at engagement and before each new dissemination period, using the promoter's questionnaire, a search of public regulatory databases and, for promoters with registered representatives, their public disciplinary records. Record the date and result of each check; a missing renewal is a common finding in annual compliance reviews.

5. Third-party ratings

Keep a short file per rating: the provider's methodology, the questionnaire the firm answered, the invoice for any participation fee or logo licence, and the date range the rating covers. Refresh the file each time the piece is updated, and withdraw the rating when a newer edition has been published that the firm did not win.

6. Specific investment advice and portfolio characteristics

7. Sustainability and ESG claims

8. EU and UK marketing communications

8.1 Deciding whether an EU version is needed

A US piece rarely works unchanged in the EU, and the safest default is a separate EU version issued by the EU entity (here Kestrel Bay Capital Europe). Decide in this order.

1. Who issues it. An EU marketing communication should come from the entity authorised to provide the service or market the fund in the EU, with that entity's name and regulator on the piece. A US adviser cannot rely on its SEC registration to market in the EU.
2. What is marketed. Fund marketing (UCITS or AIF) follows Regulation (EU) 2019/1156 and the ESMA guidelines; marketing of a discretionary or advisory service follows MiFID II and Delegated Regulation 2017/565. Pre-marketing of an AIF to professional investors has its own notification regime under the AIFMD; route it to legal.
3. To whom. Retail clients trigger the detailed performance conditions in Article 44 of the Delegated Regulation. Professional-only pieces must still be fair, clear and not misleading and clearly identifiable as marketing, and must not reach retail clients through forwarding.
4. What changes. Compare the US content with the EU conditions. The US piece shows 1-, 5- and 10-year annualised returns with gross and net side by side; an EU retail piece shows past performance over complete 12-month periods for the preceding five years (or the whole period if shorter), not as the most prominent feature, with the effect of fees and currency explained and the standard warning. Benchmark names, product names and sustainability wording must match the EU legal documents and the SFDR disclosures.
5. Where. Check host Member State rules for language, pre-notification and any local filing before first use.

Record the decision in MKT-FND rows. In the worked example, the EU use was taken out of scope (MKT-FND-006) and a separate EU review was opened.

9. Channels, distribution and third-party content

10. Books and records

11. Findings, decision and conditions

How to write a finding. State the check, what the draft said, why it fails and the exact fix, so that the person making the change does not need to interpret it. Rate a finding High when the piece would breach a specific condition of the rule (missing net performance, undisclosed compensation, hypothetical performance to a mass audience), Medium when it could mislead in context, and Low for clarity or style issues. Check the final version yourself before approving: "approved subject to changes" without seeing the changes is the most frequent weakness examiners record in marketing reviews. Conditions must be specific enough to be enforced, with an audience, a channel and an expiry date, and the marketing calendar should carry the expiry so the piece is withdrawn or refreshed on time.

12. Worked example

Example: Kestrel Bay Capital submitted v1 of a two-page factsheet for its Global Quality Equity strategy, as of 2025-12-31, for US institutional and high net worth prospects. The composite started on 2016-01-01, so the 10-year period equals the life of the composite.

Performance verified from the composite's annual returns (USD, gross after transaction costs, net after the highest fee on the standard schedule, 0.75%):

Recomputation of the 5-year net figure (Example): the product of $(1 + r_t)$ for 2021 to 2025 is $1.1922 \times 0.8374 \times 1.2057 \times 1.1342 \times 1.1102 = 1.5157$, so the annualised return is $1.5157^{1/5} - 1 = 8.67\%$.

Example decision: approved with conditions on v3 for US use only, expiring 2026-04-30 or when Q1 2026 performance is available, whichever is earlier.

13. Traceability matrix

Glossary and references

Standard and licence note

Based on SEC Rules 206(4)-1, 204-2 and 206(4)-7 under the Investment Advisers Act of 1940 and SEC staff guidance as published by the SEC and in the electronic Code of Federal Regulations (US federal works, public domain), and on Directive 2014/65/EU, Commission Delegated Regulation (EU) 2017/565 and Regulation (EU) 2019/1156 as published on EUR-Lex (reuse with acknowledgement). ESMA guidelines are referenced by number with acknowledgement; this is original material, not endorsed by ESMA. FINRA and FCA rules are cited by number only and no text from them is used. All check questions are original wording, not quotations of rule text. Kestrel Bay Capital and all figures are fictional. Check the current rules, staff FAQs, consolidated EU texts and host-country requirements before use. This is a document format, not legal, compliance or investment advice. Template licence: MIT.