ACA Article Highlights Changes in Private Fund Marketing Compliance as Retailization Takes Hold

In July, ACA Group published an article titled “How Retailization Is Reshaping Private Fund Marketing Compliance.” The article highlights that increasing interest from retail investors will require private fund managers to rethink their marketing architecture to take into account the understanding and needs of many less-sophisticated retail investors. The article highlights the requirements of Rule 506 under the Securities Act and the Marketing Rule, and offers areas where compliance professionals may want to consider examining. The article notes that marketing has become increasingly digital and with that exposure comes potential areas for concern. ACA emphasizes that compliance professionals and firms should “proactively govern not just what they say in offering materials, but how they present themselves across an increasingly public ecosystem.” This includes in the digital realm across third-party platforms and informal channels, such as LinkedIn. The article states that disclosures should be revisited “with an emphasis on portability and consistency” adding that “key information should travel with it in a way that remains understandable and appropriately balanced, even when viewed in isolation.” Firms should be aware how performance-related information and investment characteristics are marketed, in addition to setting expectations on how intermediaries and platforms may use and modify firm materials.

 

Click here to read the ACA article, “How Retailization Is Reshaping Private Fund Marketing Compliance.”