What Are Third-Party Ratings Under the SEC Marketing Rule?

 Not every list or award qualifies as a compliant third-party rating. The rule requires that the rating come from an organization that provides ratings in the ordinary course of its business, using a questionnaire or clear methodology, and that isn’t controlled by or affiliated with the adviser. Advisers citing a rating must disclose the date, the entity that created it, and whether compensation was involved.

Advisers should keep documentation on file showing the rating source meets these conditions — this is one of the areas regulators check for in examinations and deficiency reviews.