# 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 | Field | Value | |---|---| | Document ID | [MKT-REV-2026-NNN] | | Communication title | [Global Quality Equity strategy factsheet, Q4 2025] *(Example)* | | Communication type | [Factsheet / Pitch book / Website page / Social media post / Email / Video / RFP response / Press release] | | Version reviewed and file reference | [v3, file name or DMS reference] | | Firm and entity issuing it | [Kestrel Bay Capital LLC] *(Example)*; [Kestrel Bay Capital Europe for EU use] | | Intended audience | [Prospective separate account clients, US institutional and high net worth] | | Jurisdictions of use | [US / EU Member States: list / UK / other] | | Channels | [Email, website, consultant databases, in person] | | Planned first use | YYYY-MM-DD | | Expiry or refresh date | YYYY-MM-DD (for example next quarter-end performance update) | | Version | [1.0] | | Status | [Submitted / In review / Changes requested / Approved / Approved with conditions / Rejected / Withdrawn] | | Owner (submitter) | [@marketing-lead] | | Approvers/reviewers | [@compliance-reviewer], [@performance-analyst], [@portfolio-manager], [@legal] | | Last updated | YYYY-MM-DD | | Classification | [Internal] | | Retention | Communication and review record kept for at least five years from the end of the fiscal year of last use, the first two years in an appropriate office (Rule 204-2(e)(1), (e)(3)); longer where local law requires | ### Approvals | Role | Name | Decision | Date | |---|---|---|---| | Compliance reviewer | [@name] | [Approve / Approve with conditions / Reject] | YYYY-MM-DD | | Performance analyst (figures verified) | [@name] | [Verified] | YYYY-MM-DD | | Portfolio manager (strategy description accurate) | [@name] | [Confirmed] | YYYY-MM-DD | | Legal (EU or UK use, testimonials, third-party content) | [@name] | [Approve / Not required] | YYYY-MM-DD | ### Revision history | Version | Date | Author | Change | |---|---|---|---| | 0.1 | YYYY-MM-DD | [@author] | Submitted for review | | 1.0 | YYYY-MM-DD | [@author] | Approved with conditions after findings were fixed | ## Contents - [1. Scope and classification](#1-scope-and-classification) · [2. General prohibitions](#2-general-prohibitions) · [3. Performance presentation](#3-performance-presentation) · [4. Testimonials and endorsements](#4-testimonials-and-endorsements) · [5. Third-party ratings](#5-third-party-ratings) · [6. Specific investment advice and portfolio characteristics](#6-specific-investment-advice-and-portfolio-characteristics) - [7. Sustainability and ESG claims](#7-sustainability-and-esg-claims) · [8. EU and UK marketing communications](#8-eu-and-uk-marketing-communications) · [9. Channels, distribution and third-party content](#9-channels-distribution-and-third-party-content) · [10. Books and records](#10-books-and-records) - [11. Findings, decision and conditions](#11-findings-decision-and-conditions) · [12. Worked example](#12-worked-example) · [13. Traceability matrix](#13-traceability-matrix) · [Glossary and references](#glossary-and-references) · [Standard and licence note](#standard-and-licence-note) ## 1. Scope and classification ```mermaid flowchart TD A["Draft communication received"] --> B{"Offers advisory services or new services?"} B -->|"No"| X["Not an advertisement: still apply anti-fraud rules and firm policy; record reason"] B -->|"Yes"| C{"Sent to more than one person, or contains hypothetical performance?"} C -->|"No"| D{"Compensated testimonial or endorsement?"} D -->|"No"| X D -->|"Yes"| AD["Advertisement"] C -->|"Yes"| E{"Excluded category: live oral, required filing, unsolicited or one-on-one private fund hypothetical?"} E -->|"Yes"| X E -->|"No"| AD AD --> F["Sections 2 to 6 and 9 to 11 apply"] F --> G{"Used in the EU or UK?"} G -->|"Yes"| H["Section 8 applies"] G -->|"No"| I["Section 8 not applicable"] ``` | Check ID | Question | Answer | Evidence | |---|---|---|---| | MKT-SCP-001 | Is the piece an advertisement under Rule 206(4)-1(e)(1)? Record the reasoning from the flowchart | [Yes / No, reason] | [Ref] | | MKT-SCP-002 | Audience: retail or high net worth individuals, institutions, private fund investors, consultants, intermediaries | [Audience] | [Distribution list or channel] | | MKT-SCP-003 | Is it used by or with a broker-dealer affiliate or placement agent? If yes, route to the broker-dealer principal under its FINRA Rule 2210 procedures | [Yes / No] | [Ref] | | MKT-SCP-004 | Jurisdictions where it will be used, and whether each is retail or professional distribution | [List] | [Distribution plan] | | MKT-SCP-005 | Does it reuse content from another approved piece? Link that review ID and confirm the content is unchanged | [Review ID] | [Ref] | | MKT-SCP-006 | Is the piece for a registered fund or a non-US fund with its own offering rules? Note the extra regime | [Regime / None] | [Ref] | ### 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 | Check ID | Rule reference | Review question (original wording) | Result | Evidence or fix | |---|---|---|---|---| | MKT-GEN-001 | (a)(1) | Is every material statement true, and is nothing material left out that would make the statement misleading in context? | [Pass / Fail / N/A] | [Ref] | | MKT-GEN-002 | (a)(2) | Can the firm substantiate every material statement of fact on SEC request? Is the substantiation file attached (for example "top quartile" ranking source, AUM figure, client count)? | [ ] | [Ref] | | MKT-GEN-003 | (a)(3) | Could any wording, image or juxtaposition lead a reader to a false inference about the firm, for example implying a larger team, longer record or regulatory endorsement? | [ ] | [Ref] | | MKT-GEN-004 | (a)(4) | Are potential benefits balanced by the material risks and limitations, with comparable prominence? | [ ] | [Ref] | | MKT-GEN-005 | (a)(5) | Are references to specific investment advice (holdings, past recommendations) presented fairly and in balance? See section 6 | [ ] | [Ref] | | MKT-GEN-006 | (a)(6) | Are performance results and time periods included or excluded in a fair and balanced way (no cherry-picked periods)? See section 3 | [ ] | [Ref] | | MKT-GEN-007 | (a)(7) | Is the piece otherwise free of anything materially misleading, including absolute words such as "guaranteed", "safe" or "risk-free"? | [ ] | [Ref] | 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. | Perf ID | Location in piece | Figure or chart | Type (actual, related composite, extracted, hypothetical, predecessor, portfolio characteristic) | Gross or net | Period | Source system and report | |---|---|---|---|---|---|---| | PRF-001 *(Example)* | Page 1, headline table | Composite annual and annualised returns | Related performance (composite) | Both | 1, 5 and 10 years to 2025-12-31 | Performance system, composite KBC-GQE | | PRF-002 *(Example)* | Page 2, "Top contributors" | Contribution of five holdings | Extracted | Gross | Calendar 2025 | Attribution report Q4 2025 | | PRF-003 *(Example)* | Page 2, characteristics | Weighted average return on equity, Sharpe ratio | Portfolio characteristics | Gross | As of 2025-12-31 | Risk system | | [PRF-NNN] | [Location] | [Figure] | [Type] | [Gross / Net] | [Period] | [Source] | ### 3.2 Performance checks | Check ID | Rule reference | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-PRF-001 | (d)(1) | Where gross performance appears, does net performance appear with at least equal prominence, in a format that makes comparison easy, for the same period, return type and method? | [ ] | [Ref] | | MKT-PRF-002 | (e)(10) | Net performance deducts all advisory fees and expenses the audience would pay. If a model fee is used, does it produce returns no higher than actual fees would, or equal the highest fee charged to the intended audience? Review the 2026 staff FAQ on model fees | [ ] | [Ref] | | MKT-PRF-003 | (d)(2) | For portfolios other than private funds: are 1-, 5- and 10-year results shown with equal prominence, ending no earlier than the latest calendar year-end, with life of portfolio substituted where a period is longer than the record? | [ ] | [Ref] | | MKT-PRF-004 | (d)(3) | Is there any express or implied claim that the SEC approved or reviewed the performance? | [ ] | [Ref] | | MKT-PRF-005 | (d)(4) | Related performance: are all related portfolios included, or does the file show the exclusions do not make results materially higher and do not change the required periods? | [ ] | [Ref] | | MKT-PRF-006 | (d)(5) | Extracted performance: does the piece provide, or offer to provide promptly, the total portfolio results? Where only gross extracted figures appear, are the conditions in the March 2025 staff FAQ met? | [ ] | [Ref] | | MKT-PRF-007 | (d)(6) | Hypothetical performance (model, backtested, targets or projections): do policies show it is relevant to the likely financial situation and objectives of the intended audience, and does the piece explain criteria, assumptions, risks and limitations? Mass-audience use is high risk | [ ] | [Ref] | | MKT-PRF-008 | (d)(7) | Predecessor performance: same people primarily responsible now manage accounts at the firm; accounts are sufficiently similar; all similar accounts included (subject to the exclusion test); clear disclosure that results were achieved at another entity | [ ] | [Ref] | | MKT-PRF-009 | (a)(6) | Do the periods shown, start dates and benchmark choice give a fair and balanced picture? Is the benchmark appropriate and unchanged, or is a change disclosed? | [ ] | [Ref] | | MKT-PRF-010 | Firm policy | Do figures reconcile to the performance system and to any GIPS®-aligned composite report used for the same strategy? | [ ] | [Ref] | | MKT-PRF-011 | Firm policy | Are returns labelled with currency, gross or net basis, fee assumptions, reinvestment of income and the annualisation method? | [ ] | [Ref] | ### 3.3 Recomputation of annualised returns Recompute annualised figures from the annual or monthly returns held in the performance system. For $n$ annual returns $r_1, \dots, r_n$: $$ R_{\text{ann}} = \left( \prod_{t=1}^{n} (1 + r_t) \right)^{1/n} - 1 $$ 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 | Check ID | Rule reference | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-TST-001 | (e)(17), (e)(5) | Is each statement a testimonial (current client or investor) or an endorsement (other person)? List each one with its source | [ ] | [Ref] | | MKT-TST-002 | (b)(1)(i) | Clearly and prominently disclosed: client or non-client status; whether cash or non-cash compensation was provided; a brief statement of material conflicts | [ ] | [Ref] | | MKT-TST-003 | (b)(1)(ii), (iii) | Disclosed, in the piece or alongside it: material terms of compensation and a description of material conflicts | [ ] | [Ref] | | MKT-TST-004 | (b)(2)(i) | Does the firm have a documented reasonable basis to believe the testimonial or endorsement complies (for example, monitoring of a promoter's scripts)? | [ ] | [Ref] | | MKT-TST-005 | (b)(2)(ii), (b)(4)(i) | For a compensated promoter above the de minimis amount: is there a written agreement describing the activities and compensation? | [ ] | [Ref] | | MKT-TST-006 | (b)(3), (e)(3), (e)(4), (e)(9) | Is the compensated person checked against disqualifying Commission actions and disqualifying events in the past ten years, at engagement and at each dissemination? Where a person is subject to an SRO final order that did not bar or suspend them, apply the conditions in the 2026-01-15 staff FAQ | [ ] | [Ref] | | MKT-TST-007 | (b)(4)(ii) | For partners, officers, employees or affiliates: is the affiliation readily apparent or disclosed, and is their status documented? | [ ] | [Ref] | | MKT-TST-008 | Firm policy | Is the piece free of selectively chosen reviews (for example only five-star reviews from a review site) that would be misleading under the general prohibitions? | [ ] | [Ref] | 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 | Check ID | Rule reference | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-RTG-001 | (e)(18) | Is the rating produced by an unrelated party in the ordinary course of its business? | [ ] | [Ref] | | MKT-RTG-002 | (c)(1) | Does the file show the methodology and that any questionnaire was balanced (equally easy to give favourable and unfavourable answers) and not designed for a predetermined result? | [ ] | [Methodology document] | | MKT-RTG-003 | (c)(2)(i) | Are the date of the rating and the period it is based on disclosed clearly and prominently? | [ ] | [Ref] | | MKT-RTG-004 | (c)(2)(ii) | Is the identity of the third party that created and tabulated it disclosed? | [ ] | [Ref] | | MKT-RTG-005 | (c)(2)(iii) | Is any compensation paid for obtaining or using the rating (entry fee, logo licence) disclosed? | [ ] | [Ref] | | MKT-RTG-006 | (a)(3), (a)(7) | Is the rating presented without implying it covers more than it does (one strategy, one year, one category)? | [ ] | [Ref] | 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 | Check ID | Rule reference | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-ADV-001 | (a)(5) | Are holdings or recommendations chosen by an objective, consistently applied rule that is disclosed (for example "the five largest positive and five largest negative contributors")? | [ ] | [Ref] | | MKT-ADV-002 | (a)(5) | Are positive and negative examples shown with equal prominence? | [ ] | [Ref] | | MKT-ADV-003 | (d)(5), FAQ 2025 | Where contribution or characteristics are shown gross only, are the total portfolio gross and net results also shown or offered, as the staff FAQ conditions require? | [ ] | [Ref] | | MKT-ADV-004 | Firm policy | Do case studies avoid implying that results are typical or will be repeated? | [ ] | [Ref] | | MKT-ADV-005 | Code of ethics, MNPI policy | Does the piece reveal current holdings or trade intentions that clients have not received, or that could be front-run? Check the holdings disclosure lag policy | [ ] | [Ref] | ## 7. Sustainability and ESG claims | Check ID | Basis | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-ESG-001 | Rule 206(4)-1(a)(1), (a)(2) | Is each ESG, impact or climate claim specific and substantiated by data on file? | [ ] | [Ref] | | MKT-ESG-002 | Rule 206(4)-1(a)(3) | Do images, colours and words avoid implying a stronger sustainability profile than the strategy has? | [ ] | [Ref] | | MKT-ESG-003 | SFDR (Regulation (EU) 2019/2088) | For EU products: is the communication consistent with the product's SFDR pre-contractual disclosure and classification? Avoid presenting Article 8 or 9 as a label | [ ] | [Ref] | | MKT-ESG-004 | ESMA guidelines on funds' names using ESG or sustainability-related terms (ESMA34-1592494965-657) | For EU funds: does the name or tagline use ESG-related terms only where the fund meets the guideline thresholds and exclusions? | [ ] | [Ref] | | MKT-ESG-005 | UK FCA anti-greenwashing rule (ESG 4.3.1R) and labelling regime | For UK use: route to the UK compliance officer (rule cited by reference only) | [ ] | [Ref] | ## 8. EU and UK marketing communications | Check ID | Basis | Review question | Result | Evidence or fix | |---|---|---|---|---| | MKT-EU-001 | MiFID II Art. 24(3); Reg 2019/1156 Art. 4(1) | Is the piece clearly identified as a marketing communication? | [ ] | [Ref] | | MKT-EU-002 | Reg 2019/1156 Art. 4(1); ESMA34-45-1272 | Are risks and rewards described with equal prominence, and is the communication fair, clear and not misleading, including online formats? | [ ] | [Ref] | | MKT-EU-003 | Reg 2019/1156 Art. 4(2) and (3) | Does it refer to the prospectus and key information document, where and in which language to get them, and to the summary of investor rights? | [ ] | [Ref] | | MKT-EU-004 | Delegated Reg 2017/565 Art. 44(4) | Past performance (retail): not the most prominent feature; covers the preceding five years or the whole period if shorter, in complete 12-month periods; reference period and source stated; clear warning that past performance does not reliably predict future results; currency and fee effects explained where relevant | [ ] | [Ref] | | MKT-EU-005 | Delegated Reg 2017/565 Art. 44(5) | Simulated past performance: based on actual past performance of relevant instruments or an index, meets the conditions in MKT-EU-004 that apply, and carries a clear warning | [ ] | [Ref] | | MKT-EU-006 | Delegated Reg 2017/565 Art. 44(6) | Future performance: not based on simulated past performance, uses reasonable assumptions supported by objective data, shows the effect of fees where gross, uses scenarios across different market conditions, and warns that forecasts are not a reliable indicator | [ ] | [Ref] | | MKT-EU-007 | Host Member State rules | Has local pre-notification or language review been completed where required? | [ ] | [Ref] | | MKT-UK-001 | FCA COBS 4 (financial promotions), PRIN 2A (Consumer Duty) | For UK use: approved by the UK-authorised person responsible; consumer understanding tested for retail pieces (rules cited by reference only) | [ ] | [Ref] | ### 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 | Check ID | Review question | Result | Evidence or fix | |---|---|---|---| | MKT-CHN-001 | Is every channel in the distribution plan covered by the firm's archiving system (email, website, social media, messaging apps)? | [ ] | [Ref] | | MKT-CHN-002 | Are hyperlinks pointing only to approved content, and do linked disclosures sit where the reader will see them at the point of the claim? | [ ] | [Ref] | | MKT-CHN-003 | Has the firm reviewed any third-party content it shares, links or helped prepare (consultant profiles, press articles, database entries)? | [ ] | [Ref] | | MKT-CHN-004 | Are consultant database entries and RFP responses consistent with this piece and on the same performance basis? | [ ] | [Ref] | | MKT-CHN-005 | For social media: are comments and third-party posts monitored under the firm's policy, and are employee posts pre-approved where required? | [ ] | [Ref] | | MKT-CHN-006 | For video, webinars and podcasts: is the script reviewed, and is the recorded version retained? Live, extemporaneous remarks are excluded, scripted ones are not | [ ] | [Ref] | ## 10. Books and records | Check ID | Rule reference | Record | Location | Result | |---|---|---|---|---| | MKT-REC-001 | 204-2(a)(11) | Final version of the advertisement as disseminated, with dissemination dates and list or source of recipients where a list was used | [DMS reference] | [ ] | | MKT-REC-002 | 204-2(a)(16) | Accounts, books, workpapers and documents needed to demonstrate every performance figure, including information given under (d)(6) | [Performance archive] | [ ] | | MKT-REC-003 | 204-2(a)(15)(i) | Testimonial and endorsement disclosures delivered, where not included in the advertisement | [Ref] | [ ] | | MKT-REC-004 | 204-2(a)(15)(ii) | Documentation of the reasonable basis for testimonials, endorsements and third-party ratings | [Ref] | [ ] | | MKT-REC-005 | 204-2(a)(15)(iii) | Names of affiliated persons giving testimonials or endorsements under the (b)(4)(ii) exemption | [Ref] | [ ] | | MKT-REC-006 | 204-2(a)(7) | Written communications relating to predecessor performance and to the performance of managed accounts or recommendations | [Ref] | [ ] | | MKT-REC-007 | Form ADV Part 1A Item 5.L | Answers on performance, hypothetical performance, testimonials, endorsements and third-party ratings remain accurate | [Ref] | [ ] | ## 11. Findings, decision and conditions | Finding ID | Check ID | Severity (High, Medium, Low) | Finding | Required fix | Fixed in version | Verified by | |---|---|---|---|---|---|---| | [MKT-FND-NNN] | [MKT-xxx-NNN] | [Severity] | [Finding] | [Fix] | [vN] | [@name] | | Decision field | Entry | |---|---| | Decision | [Approved / Approved with conditions / Rejected] | | Conditions | [For example: use only with institutional prospects in the US; withdraw after 2026-04-30 unless performance is updated] | | Re-review triggers | New performance period; change of benchmark, fee schedule, team or strategy; new testimonial, endorsement or rating; new jurisdiction or channel | | Expiry date | YYYY-MM-DD | | Reviewer signature | [@name], YYYY-MM-DD | 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%): | Period to 2025-12-31 *(Example)* | Composite gross | Composite net | Benchmark | |---|---|---|---| | 1 year (2025) | 11.86% | 11.02% | 13.02% | | 5 years annualised (2021 to 2025) | 9.49% | 8.67% | 9.45% | | 10 years annualised (2016 to 2025) | 11.56% | 10.73% | 10.84% | | 10 years cumulative | 198.63% | 177.03% | 180.00% | 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 $1.5157^{1/5} - 1 = 8.67\%$. | Finding ID | Check ID | Severity | Finding | Required fix | Fixed in version | Verified by | |---|---|---|---|---|---|---| | MKT-FND-001 *(Example)* | MKT-PRF-001, MKT-PRF-003 | High | v1 showed only "11.56% a year since inception, gross" in the headline, with no net figure and no 1- and 5-year periods | Show the table above, net next to gross in the same font size | v2 | [@performance-analyst] | | MKT-FND-002 *(Example)* | MKT-PRF-009, MKT-GEN-006 | Medium | Headline compared the 10-year gross return with the benchmark but did not show that the strategy trailed the benchmark in 2025 and on a 10-year net basis | Present all periods with the benchmark in one table; remove "consistently ahead of the market" | v2 | [@compliance-reviewer] | | MKT-FND-003 *(Example)* | MKT-ADV-001, MKT-PRF-006 | Medium | "Top five contributors" listed without detractors or selection rule; gross only | Show five largest contributors and five largest detractors, state the rule, refer to the total portfolio net results on page 1 | v2 | [@compliance-reviewer] | | MKT-FND-004 *(Example)* | MKT-RTG-003 to MKT-RTG-005 | Medium | Award logo "[Award name] 2024" without date of rating, period covered, provider name or the logo licence fee | Add the disclosures in the footer next to the logo, or remove the logo | v3 | [@compliance-reviewer] | | MKT-FND-005 *(Example)* | MKT-PRF-007 | High | A back-tested "enhanced version" of the strategy for 2010 to 2015 was included for all prospects | Remove from the factsheet; may be provided only under the hypothetical performance policy to a defined audience with criteria, assumptions and risks explained | v2 | [@cco] | | MKT-FND-006 *(Example)* | MKT-EU-001, MKT-EU-004 | Low | Factsheet also planned for EU professional clients through Kestrel Bay Capital Europe | Produce a separate EU version; this approval covers US use only | Not applicable | [@legal] | *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 | Requirement | Check IDs | Evidence record | |---|---|---| | Rule 206(4)-1(a)(1) to (7) general prohibitions | MKT-GEN-001 to 007 | Review record, substantiation file | | Rule 206(4)-1(b) testimonials and endorsements | MKT-TST-001 to 008 | Promoter agreements, disqualification checks, disclosures | | Rule 206(4)-1(c) third-party ratings | MKT-RTG-001 to 006 | Methodology and fee records | | Rule 206(4)-1(d) performance | MKT-PRF-001 to 011, MKT-ADV-003 | Performance inventory, recomputation, Rule 204-2(a)(16) archive | | Rule 206(4)-1(e)(1) definition of advertisement | MKT-SCP-001 | Classification reasoning | | Rule 204-2(a)(7), (11), (15), (16) | MKT-REC-001 to 007 | Archive references | | Rule 206(4)-7 written policies and annual review | Whole checklist | Marketing policy; annual compliance review | | MiFID II Art. 24(3); Delegated Reg 2017/565 Art. 44 | MKT-EU-001, 004 to 006 | EU version review | | Reg 2019/1156 Art. 4; ESMA34-45-1272 | MKT-EU-001 to 003 | EU version review | | ESG claims and fund names | MKT-ESG-001 to 005 | Substantiation file | ## Glossary and references | Term | Meaning in this template | |---|---| | Advertisement | Communication within Rule 206(4)-1(e)(1), including compensated testimonials and endorsements | | Endorsement | Statement by a person other than a current client or investor that approves, recommends, solicits or refers | | Extracted performance | Results of a subset of investments taken from a portfolio | | Gross performance | Results before deducting all fees and expenses paid for the adviser's services | | Hypothetical performance | Results not actually achieved by any portfolio of the adviser, such as model, backtested, targeted or projected returns | | Net performance | Results after deducting all fees and expenses paid for the adviser's services, optionally excluding custody fees, with model fee conditions | | Predecessor performance | Results of an account or fund not advised by the advertising adviser at all times during the period shown | | Related performance | Results of portfolios with substantially similar policies, objectives and strategies to the service offered | | Testimonial | Statement by a current client or private fund investor about their experience, or that solicits or refers | | Third-party rating | Rating or ranking of the adviser by an unrelated person that produces such ratings in the ordinary course of business | | Reference | Version or date | Use | |---|---|---| | SEC Rule 206(4)-1, Investment adviser marketing (17 CFR 275.206(4)-1), eCFR | 86 FR 13024 (2021-03-05), amended 87 FR 22447 (2022-04-15) | Sections 2 to 6, 13 | | SEC Rule 204-2, Books and records (17 CFR 275.204-2), eCFR | Current, checked 2026-10-25 | Section 10 | | SEC Rule 206(4)-7, Compliance procedures and practices | Current | Policies and annual review | | SEC Division of Investment Management, Marketing Compliance FAQs | Postings 2021 to 2026-01-15 | Extracted performance, characteristics, model fees, SRO orders | | SEC Division of Examinations risk alert on testimonials, endorsements and third-party ratings | 2025-12-16 | Section 4 and 5 pitfalls | | Directive 2014/65/EU (MiFID II) Art. 24(3); Commission Delegated Regulation (EU) 2017/565 Art. 44 | Consolidated texts on EUR-Lex | Section 8 | | Regulation (EU) 2019/1156 Art. 4; ESMA Guidelines on marketing communications ESMA34-45-1272 | Guidelines applicable from 2022-02-02 | Section 8 | | ESMA Guidelines on funds' names using ESG or sustainability-related terms, ESMA34-1592494965-657 | 2024 | Section 7 | | FINRA Rule 2210; FCA COBS 4, PRIN 2A and ESG 4.3.1R | Cited by number only | Routing for broker-dealer and UK use | ## 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.