More investment firms are adopting policies to address compliance with the SEC pay-to-play rule, according to a recent survey conducted by the Investment Adviser Association, the ACA Compliance Group, and Old Mutual Asset Management.  The survey of 555 firms found that 43% of firms reported adopting pay-to-play policies as part of larger compliance policies, and 38% reported adopting stand-alone pay-to-play policies.  Both of these numbers represent increases over last year’s survey (38% and 32%, respectively).

Other key findings:

  • The number of firms that apply these policies to all employees increased from 68% last year to 76% this year; only 12% limit their policies to Covered Associates;
  • 23% of firms extend their policies to spouses and family members of Covered Associates;
  • 60% of firms require pre-clearance of Covered Associates’ political contributions;
  • 7% of firms prohibit all political contributions;
  • 60% of firms require periodic compliance certifications by employees;
  • 35% of firms require new employees to list all political contributions.

You can find Covington’s summary of the SEC Pay-to-Play rule here.  We have also compiled a detailed 50-state survey of state pension fund and investment fund pay-to-play rules.  To find out more about our state survey or pay-to-play compliance policies generally, contact us.

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Photo of Derek Lawlor Derek Lawlor

Derek Lawlor is an of counsel in the firm’s Washington office and a member of the firm’s Election & Political Law and White Collar practice groups.  He assists corporations, nonprofit organizations, and trade associations with federal and state lobbying, campaign finance, and government…

Derek Lawlor is an of counsel in the firm’s Washington office and a member of the firm’s Election & Political Law and White Collar practice groups.  He assists corporations, nonprofit organizations, and trade associations with federal and state lobbying, campaign finance, and government ethics issues.  Mr. Lawlor also represents clients in government investigations and inquiries conducted by the Federal Election Commission, Office of Congressional Ethics, and Congressional Committees and Commissions.  Prior to receiving his law degree, Mr. Lawlor worked in the Office of General Counsel at the U.S. House of Representatives.