SEC Adopts Pay-to-Play Rules; Allows Solicitation Payments to RIAs and BDs
The SEC voted to adopt new rules concerning public plan pay-to-play practices. The new rule prohibits payments to third party solicitors for public plans; however the rule permits payments to solicitors that are SEC registered investment advisers or broker-dealers. The new rules prohibit advisers from managing money for a public plan (including through a fund) if the adviser or certain executives or employees made, during the previous 2 years, a political contribution to an elected official who is in a position to select the adviser. The rules also prohibit certain bundling practices for campaign contributions.