Pay-to-Play Rule for Investment Advisers

Rule 206(4)-5 bars an adviser from receiving compensation for advisory services to a government entity for two years after the adviser or one of its covered associates makes a contribution to an official of that entity, subject to small de minimis exceptions.

It also restricts paying third parties to solicit government clients and coordinating contributions. Firms usually preclear political contributions by covered associates and keep the records Rule 204-2 requires of advisers with government clients.

1 document on political contributions, ordered by legal weight

• Current · binding law

  Pay-to-Play Rule

  Rule 206(4)-5 · 17 CFR 275.206(4)-5