The rule prohibits investment advisers from providing investment advisory services for compensation to a government entity within two years after a contribution to an official of that government entity is made, either by the investment adviser or by any covered associate of the investment adviser.  This prohibition does not apply to contributions made by a covered associate to officials for whom the covered associate was entitled to vote at the time of the contributions if the contributions did not exceed $350 in the aggregate to any one official, per election.  The prohibitions also do not apply to contributions made by a covered associate to officials for whom the covered associate was not entitled to vote at the time of the contributions if the contributions did not exceed $150 in the aggregate to any one official, per election.

An additional prohibition prevents an investment adviser from providing or agreeing to provide, directly or indirectly, payment to any person to solicit a government entity for investment advisory services unless that person is a regulated person or is an executive officer, general partner, managing member, or employee of the investment adviser.  Nor may such advisers coordinate or solicit any person or political action committee to make a contribution to an official of a government entity to which the adviser is providing or seeking to provide investment advisory services or payment to a political party of a state or locality where the investment adviser is providing or seeking to provide investment advisory services to a government entity.

The rule has two important compliance dates.  The March 14, 2011 date applied to investment advisers subject to the rule.  The other compliance date, September 13, 2011, is when investment advisers will no longer be able to use third parties to solicit government business except in compliance with this rule.  Additionally, advisers to registered investment pools have until the September 13 date to comply with this rule.