SEC Adopts Pay-to-Play Restrictions (Rule 206(4)-5)


On Wednesday June 30, 2010, members of the Securities and Exchange Commission (the “SEC”) voted unanimously to approve new Rule 206(4)-5 (the “Rule”) adopted under the Investment Advisers Act of 1940 (the “Advisers Act”). The Rule is aimed at curbing so-called pay-to-play abuses resulting from investment advisors making political contributions in order to influence persons involved in selecting investment advisors to manage public pension fund assets. The final text of the Rule was published in the Federal Register on July 14, 2010.

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