SEC’s Agenda Includes Adding Amendments to Pay-to-Play Rules

The Securities and Exchange Commission’s (SEC) release of its semi-annual regulatory agenda for 2026 includes potential reform of its pay-to-play regulations. The Division of Investment Management is considering recommending the SEC propose amendments to rule 17 C.F.R. §275.206(4)-5 under the Investment Advisers Act of 1940, which prohibits certain investment adviser pay-to-play practices, to address identified compliance burdens. The targeted regulation imposes pay-to-play rules upon investment advisers and their covered associates who make contributions to officials of state and local government entities. The rules mandate investment advisers cannot provide investment advisory services for compensation to a government entity within two years after a contribution to an official of the government entity is made by the investment adviser or any covered associate of the investment adviser. Specific recommendations for amendments to the regulation are not included in the SEC’s agenda.

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