SEC Client Communication Standards and Approval Requirements

SEC client communication standards and approval requirements mean you must supervise and control business communications and advertisements so they are not false or misleading, and you can prove review, approval, and retention. Operationalize this by defining in-scope communications, routing them through documented pre-use review where required, restricting channels, capturing messages, and running ongoing surveillance and remediation (17 CFR 275.206(4)-1).

Key takeaways:

• Treat “advertisements” and other client-facing communications as regulated content; build a documented review/approval workflow for each category (17 CFR 275.206(4)-1).
• Control where people communicate (approved channels) and preserve records so you can evidence supervision and reconstruction.
• Examiners are explicitly focusing on Marketing Rule compliance; assume communications governance will be tested (2025-exam-priorities).

A compliance program fails on communications in two ways: content and control. Content failures are what the rule targets directly: an advertisement with an untrue statement of a material fact, or content that is otherwise false or misleading (17 CFR 275.206(4)-1). Control failures are what exams often uncover: no clear definition of what must be reviewed, inconsistent approvals, staff using unmonitored tools, weak recordkeeping, and no ability to demonstrate supervisory follow-up.

This requirement page is written for a Compliance Officer, CCO, or GRC lead at a registered investment adviser who needs to stand up a practical communications governance program quickly. The goal is to give you a usable operating model: define what is in scope, assign owners, enforce approved channels, implement pre-review and post-review controls, and keep evidence that stands up in an SEC exam. The SEC has stated it will focus on compliance with recently adopted rules including the Marketing Rule, so communications and advertising controls belong on your “exam-ready” shortlist (2025-exam-priorities).

Plain-English interpretation (what the requirement means)

Under the SEC’s Marketing Rule framework, you cannot disseminate an advertisement that includes an untrue statement of a material fact or is otherwise false or misleading (17 CFR 275.206(4)-1). Operationally, that translates into two obligations:

1. Prevent false or misleading client-facing content from being published or sent.
2. Prove you supervised communications through policies, approvals, surveillance, and records that show what happened and when.

Even if your firm has strong intent, informal marketing processes (ad hoc slide edits, rep-created pitch decks, “quick” LinkedIn posts, texts to prospects) create risk because review and recordkeeping are inconsistent.

Who it applies to (entity + operational context)

Entity types: Registered Investment Advisers (RIAs) (17 CFR 275.206(4)-1).

Operationally, it applies to:

• Marketing, investor relations, and business development teams creating public-facing materials.
• Client service teams sending market commentary, performance updates, and strategy explanations.
• Portfolio managers and analysts writing commentary used externally.
• Supervised persons posting on social media when the content functions as an advertisement or business communication.
• Any staff communicating with prospects/clients in writing through email, messaging, collaboration tools, or recorded media when used for business.

High-risk communication types (common exam focus areas):

• Performance presentations, fact sheets, pitch decks, and case studies.
• Website pages and landing pages (including third-party hosted).
• Social posts and paid promotions.
• Testimonials/endorsements and any statements that could be read as promissory or misleading (you should define your house rules even where the rule has nuance).

Regulatory text

Regulatory excerpt (operator-relevant): “It shall constitute a fraudulent, deceptive, or manipulative act… for any investment adviser to disseminate any advertisement that includes any untrue statement of a material fact, or that is otherwise false or misleading.” (17 CFR 275.206(4)-1)

What the operator must do with this text:

• Build controls that stop false/misleading advertising before release (pre-use review where appropriate).
• Standardize substantiation: marketing claims must be backed by current, accessible support.
• Maintain governance and records to demonstrate supervision and to reconstruct what was disseminated, through which channel, by whom, and under what approval.

Why this is an exam issue (risk context)

The SEC Division of Examinations has stated it will focus on compliance with recently adopted rules including the Marketing Rule (2025-exam-priorities). Translate that into a working assumption: examiners will ask for your communications inventory, approval process, and samples that show consistent execution.

What you actually need to do (step-by-step)

Use this as an implementation runbook. The steps are ordered to get you to “operational control” quickly, then tighten coverage.

1) Define your communications taxonomy (what is in scope)

Create a one-page classification standard that answers:

• What counts as an “advertisement” at your firm for operational routing (map to the rule definition in your internal procedures, but keep the operator view simple).
• What is a “business communication” that still requires supervision and retention even if it is not marketing.
• What is out of scope (purely personal messages, with clear guardrails).

Deliverable: Communications & Advertising Classification Standard (version-controlled).

2) Define approved channels and block the rest

Your policy must name approved tools for client/prospect communications (email domains, archiving-enabled messaging, approved social accounts, approved webinar tools). Then implement technical enforcement where feasible:

• Mobile device management rules for corporate devices.
• Conditional access or app allowlisting for managed endpoints.
• For BYOD, written restrictions plus monitoring controls, or require use of firm-managed containers for business messages.

Deliverables: Approved Channels Register; Technical enforcement settings screenshots/exports; Exception log for any permitted nonstandard channel.

3) Stand up a content review and approval workflow (by content type)

Build a workflow that answers four questions for every communication category:

• Who drafts
• Who reviews (Compliance, Legal, Marketing principal, business owner)
• What must be checked (required disclosures, substantiation, prohibited phrases, performance presentation rules, etc.)
• When approval is required (pre-use vs periodic review vs sampling)

Practical pattern:

• Pre-use approval required: website updates, pitch decks, fact sheets, ads, social content, client letters positioned as marketing.
• Template-based approval: Compliance pre-approves templates; business fills variables; periodic checks confirm adherence.
• Post-use sampling: routine correspondence, relationship-manager emails, day-to-day service messages.

Deliverables: Written Supervisory Procedures (WSP) section for communications; Approval matrix (RACI); Standard checklists.

4) Implement substantiation files (“claim support”)

For each marketing claim, keep support that a reviewer can access quickly:

• Performance calculations and methodology notes.
• Source documents for market data and rankings.
• Internal approvals for forward-looking statements (or prohibited stance).
• Version history showing what changed and why.

Deliverables: Marketing Substantiation Library; Claim-to-support mapping (spreadsheet is fine if controlled).

5) Capture and retain in-scope electronic communications

Your recordkeeping approach should cover:

• Email journaling/archiving.
• Messaging and collaboration platforms used for business (capture, retention, and search).
• Social account capture (posts, edits, deletions where possible).
• Attachments and linked materials (final versions preserved).

Deliverables: Archiving configuration evidence; Retention schedule mapping; Retrieval test results showing you can produce records.

6) Ongoing supervision: surveillance, sampling, and escalations

Examiners look for a living program, not a binder. Run supervision with:

• Sampling plan by channel and role (risk-based).
• Lexicon/keyword surveillance for high-risk terms (promises, guarantees, misleading performance framing).
• Escalation and remediation workflow: document findings, corrective action, client correction if needed, training, and discipline where appropriate.
• Metrics that show the program runs (volume reviewed, exceptions, closure times).

Deliverables: Supervisory review logs; Exception tickets; Remediation tracker; Training attestations.

7) Train and test: “prove staff can execute”

Training should be scenario-based:

• “Can I text a client from my personal phone?”
• “Can I post performance on LinkedIn?”
• “Can I edit a pitch deck slide without re-approval?”
• “What is a ‘material’ statement?”

Deliverables: Annual and new-hire training materials; Attendance/attestations; Short knowledge checks.

Required evidence and artifacts to retain (exam-ready checklist)

Keep these in a centralized, version-controlled repository:

• Communications governance policy and WSP sections (17 CFR 275.206(4)-1)
• Inventory of communication types and channel mapping
• Approved channels register + enforcement evidence
• Approval matrix and completed approval tickets (with timestamps and approver identity)
• Final-form communications (what was actually sent/published), with version history
• Substantiation for claims (performance, rankings, statements of fact)
• Archiving/retention configuration evidence and periodic retrieval tests
• Surveillance/sampling plan, review logs, exception management records
• Training materials, completion evidence, and disciplinary/remediation records where relevant
• Third-party oversight artifacts if marketing is outsourced (contracts, review responsibilities, content submission workflow)

Common exam/audit questions and hangups

Expect these questions, and prepare a “rapid response” binder:

1. Show me your process for approving advertisements. Provide the workflow, approver roles, and a sample set with evidence (17 CFR 275.206(4)-1).
2. How do you define and identify advertising vs ordinary correspondence? Provide your taxonomy and routing rules.
3. Which channels are approved and how do you prevent off-channel communications? Show policy plus technical controls and exception handling.
4. How do you substantiate performance and other claims? Produce substantiation packs quickly.
5. Can you retrieve messages for a specific employee and date range? Run a live retrieval test.
6. How do you supervise social media? Show account control, review approach, and capture.

Frequent implementation mistakes (and how to avoid them)

• Mistake: treating “approval” as an email reply. Fix: use a ticketing/workflow tool or a controlled inbox with required metadata and an audit trail.
• Mistake: approving a template but not controlling local edits. Fix: lock templates, require re-approval for any change, and store the final distributed version.
• Mistake: channel policy without technical enforcement. Fix: block where you can, monitor where you can’t, and document exceptions with compensating controls.
• Mistake: record retention that captures emails but misses attachments and social edits. Fix: test capture end-to-end; preserve final PDFs and posted content.
• Mistake: no documented escalation path. Fix: define severity levels, required actions, and who signs off on closure.

Practical 30/60/90-day execution plan

Use phased execution without assuming exact implementation duration for your environment.

First 30 days (stabilize and stop the bleeding)

• Publish approved channel rules and interim restrictions; communicate “no off-channel” expectations.
• Create your communications taxonomy and a preliminary inventory of all recurring marketing materials.
• Implement an interim pre-use approval requirement for all new/updated marketing content.
• Start substantiation files for the top-used decks, fact sheets, and website pages.

Days 31–60 (build repeatable workflows)

• Implement a formal approval workflow with checklists and required fields.
• Stand up archiving/capture for in-scope electronic communications and validate retrieval.
• Draft and approve WSP updates with clear roles and escalation procedures.
• Launch training targeted to marketing, IR, and client-facing teams.

Days 61–90 (supervise and evidence)

• Run supervisory sampling and document findings, escalations, and remediation.
• Add keyword surveillance and periodic management reporting.
• Tighten technical enforcement and close high-risk exceptions.
• Conduct an internal mock exam: pick samples and prove you can produce approvals, substantiation, and retained records quickly (2025-exam-priorities).

Tooling note (where Daydream fits)

If you are managing approvals, evidence, and exceptions across email, chat, documents, and multiple teams, the program breaks down in handoffs. Daydream can act as the system of record for the communications control set: routing reviews, tracking approvals, storing substantiation and final versions, and maintaining an audit-ready evidence trail tied to your WSP requirements (17 CFR 275.206(4)-1).

Frequently Asked Questions

Do all client emails require pre-approval by Compliance?

No. Most firms use a tiered model: pre-approve advertisements and marketing materials, then supervise routine correspondence through sampling and surveillance. Your WSP should state which categories require pre-use review and why (17 CFR 275.206(4)-1).

What counts as “false or misleading” in practice?

Anything with an untrue statement of a material fact, or content that creates a misleading impression based on what is said or omitted (17 CFR 275.206(4)-1). Treat performance presentation, rankings, and promissory language as high-risk and require substantiation and structured review.

Can employees use WhatsApp or personal texting for client communication if we archive emails?

Allowing off-channel messaging creates supervision and recordkeeping gaps. If you permit it, you need documented approval, compensating controls, and capture/retention that lets you reconstruct communications consistently across channels.

How should we handle social media posts by investment professionals?

Define whether posts are business communications or advertisements under your taxonomy, require use of approved accounts/tools, and apply pre-approval or post-review sampling based on risk. Keep records of what was posted and any edits/deletions you can capture.

We outsource marketing to a third party. Who is responsible for compliance review?

Your adviser remains responsible for what is disseminated under its name. Set contract terms for content submission, required substantiation, your right to approve, and record retention expectations aligned to your WSP (17 CFR 275.206(4)-1).

What evidence do examiners usually want first?

They typically start with your policies/WSP, your inventory of advertisements, and a sample set showing approvals, substantiation, and retained final communications. The SEC has flagged Marketing Rule compliance as an exam focus area (2025-exam-priorities).