On July 31, the Securities and Exchange Commission (SEC) was to begin enforcing pay-to-play rules under 17 C.F.R. §275.206(4)-5 for third party solicitations. However, on June 25, the SEC stated until there is an effective date of a Financial Industry Regulatory Authority (FINRA) pay-to-play rule or an effective date of a Municipal Securities Rulemaking Board (MSRB) pay-to-play rule, whichever is later, the Division of Investment Management would not recommend enforcement action to the SEC against an investment adviser or its covered associates under rule 206(4)-5(a)(2)(i) for the payment to any person to solicit a government entity for investment advisory services. Neither FINRA nor the MSRB have yet adopted pay-to-play rules.

Pay-to-play rules imposed by 17 C.F.R. §275.206(4)-5 apply to investment advisers and their covered associates who make contributions to officials of state and local government entities.