meta_id 3464460

On September 3, 2026, the U.S. Securities and Exchange Commission (SEC) issued a proposal to rescind its "pay-to-play" rule, which has prohibited investment advisers from providing compensated investment advisory services to government clients for two years following political contributions to certain elected officials or candidates. The SEC would also amend recordkeeping requirements associated with the rule. All other requirements under the Advisers Act would remain in effect, including fraud prohibitions, fiduciary duty requirements, compliance rules, and codes of ethics. Since its adoption in 2010, the political contribution rule has generated significant unintended consequences, according to the SEC. Investment advisers have reported that the rule is operationally challenging to implement and creates a de facto strict liability standard, potentially triggering substantial prohibitions and fines for minor donations or technical violations. Some advisers have implemented blanket prohibitions on political contributions at state and local levels. SEC Chairman Paul S. Atkins said the rule has "imposed serious penalties for small, often impulsive donations" and has "routinely punished and handicapped advisory firms for an employee making a donation even before joining the business." Atkins added that adviser implementation of the rule has "effectively resulted in the suppression of political speech," and that matters involving political contributions are "more properly governed by local ordinances, state laws, and federal election regulations—not by the SEC." The proposal specifically targets rescission of Advisers Act Rule 206(4)-5 and amendments to the Advisers Act recordkeeping rule. The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.