8 September 2026 • 2 minute read
SEC proposes rescinding political contributions rule for investment advisers
The proposal
On September 3, 2026, the United States Securities and Exchange Commission (SEC) proposed to rescind Advisers Act Rule 206(4)-5 (political contributions rule) in its entirety and to amend Rule 204-2 to remove the associated political contribution recordkeeping requirements.
The political contributions rule currently imposes a two-year compensation ban after certain political contributions by an adviser (including both registered advisers and exempt reporting advisers) or its covered associates to certain government officials or candidates who may influence adviser selection by government entities. In public statements, the SEC staff explained that the rule has produced unintended consequences, including a de facto strict-liability standard triggered by small contributions, barriers to hiring and promoting qualified personnel, and compliance practices that restrict employee political contributions altogether.
In its proposal, SEC staff indicated that the political contribution rule’s intended goals of deterring fraud would be better achieved through a principles-based approach and that other existing laws and regulations provide a sufficient framework to support it.
Current status
The political contributions rule and all associated recordkeeping requirements remain in effect. Investment advisers (both registered and exempt) are required to continue to adhere to existing political contributions compliance programs, monitoring, preclearance, and related recordkeeping obligations unless and until the SEC adopts the proposal, and it becomes effective.
What’s next?
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register. For additional details, see the SEC’s rulemaking page, press release, and fact sheet.
Questions?
If you have any questions regarding the proposed rescission, please contact one of the authors, your DLA Piper relationship attorney, or another member of the DLA Piper Investment Funds team.