The U.S. Securities and Exchange Commission proposed rescinding the investment adviser pay-to-play rule, which restricts advisers from receiving compensation for services to a government entity after certain political contributions by the adviser or its covered associates. An accompanying statement supporting full repeal argued that the rule is overly broad, has prompted some advisers to prohibit contributions outright and unduly restricts political speech. If adopted, the rescission would not remove other legal constraints on pay-to-play conduct, including the Investment Advisers Act’s antifraud provisions. The statement also sought feedback on whether similar political contribution restrictions applying to municipal securities activity, security-based swap dealers and certain Financial Industry Regulatory Authority members should be rescinded, and whether SEC guidance could discourage advisers from continuing blanket employee contribution bans.
2026-09-04U.S. Securities & Exchange Commission
U.S. Securities and Exchange Commission proposes full repeal of investment adviser pay-to-play rule
The U.S. Securities and Exchange Commission proposed fully rescinding its investment adviser pay-to-play rule, citing its broad restrictions on political contributions and speech. Other laws, including the Investment Advisers Act’s antifraud provisions, would continue to prohibit improper pay-to-play practices.