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A Better Partnership


Nov 2009
November 06, 2009

SEC Regulation S-AM - Compliance Date Now June 1, 2010

The Securities and Exchange Commission has announced that it is extending the compliance deadline for Regulation S-AM, Limitations on Affiliate Marketing, to June 1, 2010.

Unlike Regulation S-P, the new Regulation S-AM does not limit a firm's ability to share information, but rather limits the ability of a firm or its affiliate to use "eligibility information" for a marketing solicitation. Eligibility information includes information that would constitute a "consumer report" without regard to certain exclusions under Section 603(d)(2)(A) of the Fair Credit Reporting Act. Eligibility information does not include aggregate or blind data that does not contain personal identifiers such as account numbers, names, or addresses.

Regulation S-AM limits the use of eligibility information received from or provided to an affiliate of a broker-dealer, investment adviser, or other covered person for a marketing solicitation unless:

(1) the consumer (including customers and clients) has been given a clear and conspicuous notice of the intended use of their information (such as in the firm's privacy notice); and

(2) a reasonable opportunity, and a reasonable and simple method, to opt out of such solicitations (such as the method used for privacy notice opt-outs).

The effective date for Regulation S-AM was September 10, 2009, but the compliance deadline has now been extended by the SEC from January 1, 2010 to June 1, 2010, allowing firms and their affiliates more time to implement the new requirements.

Firms and their affiliates should carefully review the various definitions contained in the new rule to assess how it may apply to their marketing activities. Click here to get a copy of the SEC's Small Entity Compliance Guide explaining Regulation S-AM. Please do not hesitate to contact us if you have any questions or we can be of any assistance in your preparations for the new rule's requirements.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.



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