On September 3, 2026, the Securities and Exchange Commission (“SEC”) voted to propose rescinding in its entirety Rule 206(4)-5 under the Investment Advisers Act of 1940, the agency’s longstanding “pay-to-play rule” applicable to investment advisers. If finalized, the proposal would eliminate the most significant federal political law compliance regime for investment advisers and reverse a regulatory framework that was adopted in 2010 and took effect in 2011.

In this alert, we describe the SEC’s proposal and key takeaways.

Tags: pay-to-play, SEC
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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads…

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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Photo of Elizabeth Upton Duncan Elizabeth Upton Duncan

Elizabeth Upton Duncan is a member of the Election and Political Law Practice Group in the Washington, DC office, representing and counseling corporate, political, and individual clients in matters before government agencies and Congress. Elizabeth defends clients in high-profile congressional investigations before House…

Elizabeth Upton Duncan is a member of the Election and Political Law Practice Group in the Washington, DC office, representing and counseling corporate, political, and individual clients in matters before government agencies and Congress. Elizabeth defends clients in high-profile congressional investigations before House and Senate Committees, as well as in criminal and civil government investigations before the Public Integrity Section of the Department of Justice and the Federal Election Commission. She has experience assisting companies in responding to formal and informal inquiries, requests, and subpoenas for documents, information, and testimony, and has experience preparing senior executives to testify before congressional committees. Prior to joining Covington, Elizabeth served as a Law Clerk to the U.S. Senate Permanent Subcommittee on Investigations (PSI).

Elizabeth also advises companies, PACs, nonprofits, and individuals on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, as well as the election and political laws of states and municipalities across the country.

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Photo of Meredith Rolfs Severtson Meredith Rolfs Severtson

Meredith is an associate in the Washington, DC office. She is a member of the Election and Political Law Practice Group and advises corporations, political committees, nonprofits, and individuals on compliance with federal and state lobbying, campaign finance, and government ethics laws. She…

Meredith is an associate in the Washington, DC office. She is a member of the Election and Political Law Practice Group and advises corporations, political committees, nonprofits, and individuals on compliance with federal and state lobbying, campaign finance, and government ethics laws. She also represents clients in congressional investigations and other matters before government agencies.

Meredith maintains an active pro bono practice with a focus on voting rights.

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