On March 19, 2025, the SEC staff published a Marketing FAQ with new guidance on extracted performance and how to navigate the performance versus investment characteristic question—some of the trickiest aspects of the Marketing Rule, which was initially adopted in 2020.
We’ve developed this checklist to help advisers apply this new guidance to their reviews. Feel free to print it off and reference it often.
The Five-Step Checklist
- Identify as Gross Performance
- Label an Extract “Gross” or;
- Disclose Extract or Characteristic calculation as not reflecting the deduction of all fees and expenses that a client or investor has paid or would have paid.
- Show Total Portfolio Gross and Net Performance Consistent with the Marketing Rule
- Include one-, five-, and ten-year periods for performance other than any private fund.
- Show Total Portfolio Gross and Net Performance with Equal Prominence
- Same size font and same level of attention within the advertisement.
- Facilitate Comparison of the Extract to the Total Portfolio Performance
- Present total net performance on the same page or a prior page to the Disclose Extract or Characteristic presentation.
- Calculate Total Portfolio Performance over a Time Period that Contains the Extract or Characteristic
- The time period for the total net performance must include the entire period presented for the Extract or Characteristic.
SEC Examples
What’s an Extract?
The performance of one investment or a group of investments in a private fund or other portfolio, such as a case study, investment level performance, and deal level performance.
What’s an investment or portfolio characteristic?
In the SEC’s Marketing Rule FAQ, the SEC staff gave the following examples of characteristics that could be considered performance:
- Yield
- Contribution to Return
- Sector Returns
- Attribution Analyses
- The Sortino Ratio
- Coupon Rate
- Volatility
- Geographic Returns
- The Sharpe Ratio
- Other Metrics
Still have questions?
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Meet Our Compliance Administration Team
Ellen Harvin
CEO, Compliance Administration and Performance Services
