Misleading Marketing Communications and Fair Presentation

The misleading marketing communications and fair presentation requirement means every advertisement you disseminate must be accurate, complete in context, and not misleading by implication, even if each sentence is technically true. To operationalize it, you need a defined review workflow, substantiation files for claims, controlled distribution channels, and ongoing supervision and retention of marketing communications. (17 CFR 275.206(4)-1)

Key takeaways:

• Treat “true but misleading” as a violation risk; context, omissions, and formatting matter. (17 CFR 275.206(4)-1)
• Build a repeatable pre-use review and substantiation process for every marketing claim, chart, and performance statement.
• Examiners are focused on Marketing Rule compliance, so be ready to evidence your controls and approvals. (2025-exam-priorities)

If you’re a CCO or GRC lead at an SEC-registered investment adviser, you need marketing controls that catch problems before materials reach prospects or clients. The Marketing Rule’s anti-fraud provision makes it a “fraudulent, deceptive, or manipulative” practice to disseminate an advertisement that includes an untrue statement of material fact or is otherwise false or misleading. (17 CFR 275.206(4)-1)

Operationally, this requirement hits more than glossy pitch decks. It covers website content, social media posts, investor letters used for solicitation, RFP responses, one-pagers, fact sheets, consultant databases, and even “informal” emails if they meet the definition of an advertisement. The hard part is not spotting obvious falsehoods; it’s preventing misleading implications created by selective presentation, missing qualifiers, unclear time periods, cherry-picked results, or design choices that overemphasize positives.

The SEC’s Division of Examinations has stated it will focus on compliance with the Marketing Rule, which increases the likelihood that your team will be asked to show how you govern marketing content end-to-end. (2025-exam-priorities) This page gives requirement-level implementation guidance you can put into production quickly.

Regulatory text

Rule requirement (anti-fraud advertising standard):
“It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the 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)

Operator interpretation: what you must do

• Prevent untrue statements of material fact in any advertisement you disseminate. That includes quantitative claims (e.g., performance, fees) and qualitative claims (e.g., “best,” “lowest risk,” “institutional-grade”) when the phrasing implies a factual comparison.
• Prevent “otherwise false or misleading” advertisements. This is the “fair presentation” reality: the overall net impression matters. You can violate the rule through omissions, unclear definitions, selective timeframes, or formatting that causes a reasonable investor to take away the wrong message. (17 CFR 275.206(4)-1)

Plain-English interpretation of the requirement

You need marketing communications that a reasonable reader would not misunderstand. If a claim requires context to be true (assumptions, time period, exclusions, benchmarks, material risks), that context must be presented clearly and close to the claim. Fine print cannot be your primary control.

A practical way to apply this: test the “net impression.” Ask, “What will the reader believe after one pass?” If the answer is more favorable than what your substantiation supports, the piece is misleading even if it’s technically accurate line-by-line. (17 CFR 275.206(4)-1)

Who it applies to (entity and operational context)

Primary scope

• Registered Investment Advisers (RIAs) and their supervised persons involved in drafting, approving, or distributing advertisements. (17 CFR 275.206(4)-1)

Operational contexts where this shows up

• Marketing and IR workflows: pitch decks, fact sheets, DDQs/RFPs, consultant questionnaires, model portfolio commentary, fund updates used to solicit.
• Digital channels: websites, blogs, podcasts, webinars, social posts, paid ads, and third-party listing platforms where you control content.
• Sales communications: email follow-ups and attachments that function as marketing collateral.
• Third parties acting for you: placement agents, solicitors, PR firms, or affiliated distributors when they disseminate your advertising or advertise on your behalf. You still own the compliance outcome, so you need controls over what they can say and how they get approvals.

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

1) Define “advertisement” for your firm and lock scope into procedure

Create a short internal standard that identifies what your firm treats as in-scope advertisements and routes them to review. Tie it to distribution methods (public, 1:many, targeted prospect lists) and content types (performance, strategy, fees, ESG, risk, comparisons).

Output: Marketing/Advertising SOP mapped to your communications channels and content types. (17 CFR 275.206(4)-1)

2) Build a pre-dissemination review and approval workflow

Set a rule: no dissemination without approval for in-scope items. Then operationalize it.

• Intake form: owner, audience, channel, date needed, whether performance is included, whether third-party statements/testimonials/endorsements are included (if applicable), and a list of claims requiring substantiation.
• Review roles: Marketing (owner), Compliance (risk gate), Legal (as needed), Portfolio/Analytics (performance support).
• Approval record: final PDF/image capture + approval metadata (approver, date, version, where it will be posted/sent).

Control objective: you can prove the version disseminated equals the version approved. (17 CFR 275.206(4)-1)

3) Require substantiation for every material claim (create a “claim-to-proof” file)

For each marketing piece, maintain a substantiation packet that answers: “How do we know this is true, complete, and not misleading?”

• Performance claims: calculation source, time period, fee treatment, benchmarks, assumptions.
• Risk/volatility claims: methodology and limitations; avoid implying guaranteed outcomes.
• Comparisons (“lower fees,” “top quartile,” “best ideas”): define comparison set and time period; verify the data source.
• Operational claims (“institutional process,” “daily monitoring,” “dedicated team”): link to actual procedures, resourcing, and governance.

Use a simple table:

Claim in marketing	Where it appears (page/slide)	Risk type (misstatement/omission/net impression)	Substantiation source	Required context/disclosure	Owner

Tip: If you cannot substantiate a claim quickly, remove it or rewrite it to a supportable statement.

4) Apply a “fair presentation” checklist to net impression

Add a mandatory checklist that reviewers must complete, focused on the common “technically true but misleading” patterns:

• Timeframe clarity: Are returns/metrics tied to specific periods and clearly labeled?
• Prominence: Are qualifiers as prominent as the claim (font size, placement, not buried)?
• Balance: Are material risks and limitations presented close to benefits?
• Definitions: Are terms like “downside protection,” “drawdown,” “risk-managed,” “AI-driven,” “impact,” “sustainable” defined or bounded?
• Consistency: Do statements match Form ADV, strategy docs, and actual practice?

Document checklist completion in the approval record. (17 CFR 275.206(4)-1)

5) Control where marketing can be sent from (channels) and retain what was sent

Misleading statements often bypass review through “side channels.” Put guardrails in place:

• Approved business communication channels: specify what tools are permitted for marketing and client communications, and block or restrict unapproved channels where feasible.
• Capture and retention: retain in-scope electronic communications, including mobile and collaboration platforms, consistent with your recordkeeping program.
• Supervisory sampling: test outbound communications for unapproved materials, off-script claims, and altered attachments; track escalations and remediation.

These are practical controls that reduce the chance that a misleading statement gets disseminated without your approval trail.

6) Train the teams who create risk (and measure behavior)

Train Marketing, IR, Sales, and senior leadership on:

• What counts as an advertisement at your firm
• Examples of misleading net impressions (omissions, cherry-picking, unclear benchmarks)
• The required workflow and “no approval, no send” rule
• How to request substantiation support

Then validate adoption: monitor exceptions (materials found in the wild without approval) and feed them into remediation.

7) Set up exception handling and rapid takedown

Define a simple playbook:

• Who can order a takedown
• How you identify affected channels and recipients
• How you correct or clarify (revised material, follow-up email)
• How you document root cause and corrective actions

Examiners care that you can detect and fix issues, not only that you have a policy.

Required evidence and artifacts to retain

Maintain an “advertising file” per item (or per campaign) with:

• Final approved version (PDF/screenshot/video file) and version history
• Approval records (who approved, when, what changed)
• Substantiation packet (claim-to-proof mapping, data extracts, calculations, third-party sources)
• Fair presentation checklist completion
• Distribution log (where posted/sent; dates; channels; third parties involved)
• Communications capture records for disseminated content (where applicable)
• Exception tickets, escalations, remediation, and takedown documentation

If you use Daydream to coordinate third-party and internal attestations, approvals, and evidence collection, set it up so each marketing artifact has a single system-of-record entry linking approvals to substantiation and retention. Keep the workflow auditable.

Common exam/audit questions and hangups

Expect questions aligned to Marketing Rule focus in exams. (2025-exam-priorities)

• “Show me your advertising policies and procedures and how you determine what is an advertisement.”
• “Provide a sample of advertisements disseminated during the period and the supporting substantiation.”
• “How do you ensure the disseminated version matches the approved version?”
• “How do you supervise social media and employees’ outbound messages?”
• “How do you oversee third parties who market on your behalf?”
• “Show exceptions: items disseminated without approval, and what you did about them.”

Hangups that trigger follow-ups:

• Missing substantiation for qualitative superlatives (“best,” “leading,” “proven”).
• Disclosures that exist but are not prominent, not proximate, or written so narrowly that they do not cure the net impression.
• Inconsistent claims across channels (website says one thing; pitch deck says another).

Frequent implementation mistakes and how to avoid them

1. Treating review as a format check.
   Fix: make “claim-to-proof” mandatory for every material statement. (17 CFR 275.206(4)-1)

2. Approving drafts, then distributing modified versions.
   Fix: lock distribution to the approved file (controlled repository, watermarking, or distribution through a system that preserves the approved attachment).

3. Letting “informal” channels become marketing channels.
   Fix: define approved channels, technically restrict where feasible, and run supervisory sampling.

4. Disclosures that don’t cure the headline.
   Fix: require prominence and proximity checks; reword the headline to be accurate without relying on footnotes.

5. No governance for third parties.
   Fix: contractually require pre-approval, provide approved language, and perform periodic sampling of what the third party disseminates.

Enforcement context and risk implications

Even without a specific enforcement case list here, the rule text is explicit: disseminating an advertisement that is untrue or misleading is treated as a fraudulent, deceptive, or manipulative practice under the Advisers Act framework. (17 CFR 275.206(4)-1) Practically, that means the risk is not limited to a marketing correction. It can become a deficiency, a referral, reputational harm, client disputes, or broader program scrutiny.

The SEC has also publicly stated it will focus on Marketing Rule compliance in examinations, which raises the operational need to keep evidence organized and reviewable. (2025-exam-priorities)

Practical 30/60/90-day execution plan

First 30 days (stabilize and stop uncontrolled dissemination)

• Inventory your marketing channels and content types; define what must route to review. (17 CFR 275.206(4)-1)
• Implement a “no approval, no send/post” rule with an interim approval mailbox or ticketing queue.
• Freeze templates: slide masters, fact sheet formats, standard disclosures, and required definitions.
• Start retaining: capture current website pages and the latest versions of top-used decks.

Days 31–60 (make it repeatable and evidence-ready)

• Launch the formal workflow: intake, review roles, versioning, final approval record.
• Deploy the fair presentation checklist and the claim-to-proof substantiation table.
• Train Marketing/IR/Sales; document attendance and include real examples from your materials.
• Stand up supervisory sampling for outbound communications and social posts; define escalation paths.

Days 61–90 (harden controls and extend to third parties)

• Apply channel controls: restrict unapproved communication tools where feasible; expand capture/retention for in-scope communications.
• Add third-party oversight: approved messaging, pre-approval requirement, periodic sampling, and documented remediation.
• Run an internal mini-exam: select a sample of disseminated advertisements and test whether you can produce approval + substantiation + distribution evidence quickly.
• If you use Daydream, configure a single evidence collection path that ties each approved advertisement to its substantiation and retention records, so exam response becomes retrieval, not reconstruction.

Frequently Asked Questions

Do “true statements” still violate the misleading marketing communications and fair presentation requirement?

Yes, if the overall net impression is false or misleading because of missing context, selective presentation, or unclear definitions. The rule covers advertisements that are “otherwise false or misleading,” not only those with explicit untrue statements. (17 CFR 275.206(4)-1)

What’s the minimum substantiation standard for marketing claims?

Keep enough documentation to show the claim is accurate and not misleading in context, including assumptions, time period, and limitations. If you cannot produce support promptly, treat the claim as non-approvable until rewritten or supported. (17 CFR 275.206(4)-1)

Does this apply to social media posts and short-form content?

If the post is an advertisement, it must not be misleading, even with character limits. Use tighter, supportable claims and link to fuller context, but do not rely on links to fix a misleading headline. (17 CFR 275.206(4)-1)

How do we control “off-deck” statements by Sales or IR?

Define approved channels and content, require use of approved materials, and run supervisory sampling with documented remediation for exceptions. Pair that with targeted training on common misleading phrasing. (17 CFR 275.206(4)-1)

What will SEC examiners ask for first?

Expect requests for your marketing/advertising policies and procedures, samples of advertisements, and the substantiation supporting those advertisements. Marketing Rule compliance is an exam focus area. (2025-exam-priorities)

Can we delegate marketing to a third party (placement agent/PR firm) and treat their content as “theirs”?

You still need governance: require pre-approval of statements about your advisory services, provide approved language, and periodically test what they disseminate. If they distribute your advertising, the risk comes back to you. (17 CFR 275.206(4)-1)