Client Alert: Update: SEC Pay-To-Play Rules Become Effective


The new SEC pay-to-play rules we described in our July 2, 2010 Client Alert were published in the Federal Register on July 14, 2010 and, as a result, will become effective on September 13, 2010. 

Generally, advisers, including most general partners and management companies of private pooled investment funds, must comply with the political contribution and reporting provisions of the rules by March 14, 2011.[1]   They also must comply with the ban on using unregistered third party placement agents to solicit investments from government authorities (such as state pension authorities) by September 13, 2011 and may no longer use third parties to solicit government business after that date unless the agents qualify under the rules as “regulated persons” (certain registered broker-dealers and registered investment advisers) permitted to engage in such activities. 

Please click here for a link to our July 2 Client Alert describing the substance of the new rules. If you have any questions about the status or details of the SEC pay-to-play rules, please contact: 

Keith W. Kaplan, Esq.
(215) 569-4143


Jon M. Katona, Esq.
(215) 569-4222


This Client Alert has been prepared by Klehr Harrison Harvey Branzburg LLP (the “Firm”) for the general information of our clients and other interested persons.  This Client Alert is not, and is not intended to be, comprehensive in nature.  Due to the general nature of its content, this Client Alert is not and should not be regarded as legal advice or the opinion of the Firm, and you should not rely on any information in this Client Alert for any specific situation. Rather, you should consult with us or other legal counsel with respect to particular circumstances addressed in this Client Alert before taking any action. Receipt of this summary does not create an attorney-client relationship between you and the Firm.


[1] Advisers who meet a limited set of exemptions from the Investment Advisers Act of 1940, such as the “intra-state” exemption, are exempt from the rules, and there are later compliance periods for advisers who advise a limited set of investment pools that invest in government funds. These exemptions generally would not apply to most management companies and general partners of private funds. However, please call us if you want more information on them.